ResCap Platform Will Be Sold First, Then Whole Loans

On Tuesday at ten in the morning the bankruptcy trustee for Residential Capital Corp. will auction the company’s platform followed by the disposition of the firm’s whole loan portfolio on Wednesday, according to a new public filing.

The bankrupt lender/servicer will be disposed of through an asset sale in lower Manhattan. A public hearing on the auction will be held on Nov. 19.  

Investors, analysts, and servicing advisors tracking the auction believe the odds strongly favor investor Nationstar Mortgage, which has been diligently selling debt and raising capital for the bid. (Wells Fargo is one of its bankers.)

Ocwen Financial, Berkshire Hathaway, and at least one other bidder will be competing for ResCap, which controls $365 billion of residential mortgage servicing rights, according to figures compiled by National Mortgage News and the Quarterly Data Report.

ResCap is controlled by Ally Financial, a bank holding company that is 70% owned by the U.S. Treasury.

In mid-May, Nationstar agreed to purchase for almost $4 billion a large chunk of ResCap from Ally via a prepackaged bankruptcy arrangement. A few months later Nationstar raised its bid by $125 million.

ResCap filed for bankruptcy protection in May, filing papers in U.S. Bankruptcy Court for the Southern District of New York.