Wachovia Interested in GMAC Residential?

The mortgage-minded Wachovia Corp. here is the latest name to surface in the bidding sweepstakes for Residential Capital Corp., the holding company for GMAC Residential and its affiliates.

Industry executives say the banking giant's interest in ResCap makes sense because of its desire to grow its mortgage business not just in the U.S. but overseas. (GMAC-RFC has a large presence in the U.K. market.)

"GMAC is a great company," said one executive who competes against them. "I'm just afraid someone is going to go in and steal the company. I wish we could bid on it."

Among servicers, GMAC Residential, Horsham, Pa., ranks seventh with $276 billion in housing receivables while its affiliate, Homecomings Financial, Minneapolis, ranks 13th with $94 billion. To date, investment bankers have identified a handful of potential bidders including Bank of America, General Electric, Wells Fargo and Kohlberg Kravis & Roberts. (KKR and two partners are still trying to close on their purchase of GM's GMAC Commercial, the nation's largest commercial mortgage banking firm. (See related story in this issue.)

It is understood that BoA and Wells are no longer in the running for ResCap, and KKR's intentions are unclear.

As far as Wachovia is concerned, the bank has the financial wherewithal but its exact intentions are unknown. A spokeswoman for the mortgage group said the company does not comment on market rumors. GM also would not comment on the matter.

Wachovia operates 3,300 financial centers and 700 retail brokerage offices. It ranks 12th among all residential funders in the U.S., but 24th among servicers, according to the Quarterly Data Report. It also owns subservicer HomeEq Servicing Corp., North Highlands, Calif.

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