New York Post Reports ResCap Sale Hits Snag

Posted by Orb Staff on January 19, 2010 No Comments
Categories : Mortgage Servicing

GMAC's plan to sell its troubled Residential Capital (ResCap) mortgage unit is hitting a snag in the form of infighting. That, according to a Tuesday report in The New York Post.

The Post, which was among the first news outlets to speculate last month that Warren Buffett's buying of ResCap bonds was part of an acquisition strategy, says that GMAC and ResCap, each of which has its own board of directors, cannot agree on how to manage the sale process.

GMAC spokesperson Gina Proia told the paper that ‘any significant transaction between GMAC and ResCap would involve the respective boards, and each has independent directors.’

‘The boards may choose to hire independent advisers,’ she added.

In an interview with Bloomberg TV last Friday, Wilbur Ross, chairman and CEO of WL Ross & Co. (parent company of American Home Mortgage Servicing Inc.), was asked whether he would compete with Buffett's rumored attempt to buy ResCap.

While Ross deflected the question slightly, saying the company doesn't announce bids, he did say that, as the largest independent servicer of nonprime loans, his company was naturally curious about the offering.

"[A]nytime a large servicing platform comes up, it's logical to at least think we'll look at it," Ross commented.

SOURCES: New York Post, Bloomberg

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