ResCap's Servicing Continues to Decline
New York-Mortgage banker Residential Capital Corp. - whose parent recently completed a huge debt swap with bond holders - continued to bleed red ink in the fourth quarter, posting a loss of nearly $1 billion as both its home loan fundings and servicing rights suffered.
Still, among all residential servicers, ResCap, a subsidiary of GMAC Financial Services, ranked fifth nationwide, according to preliminary fourth-quarter figures compiled by this newspaper and the Quarterly Data Report. ResCap, which late last year closed its wholesale channel, funded $8.5 billion in home mortgages in the fourth quarter, a 59% decline from a year earlier.
Its servicing portfolio fell to $393.8 billion at year-end 2008 compared to $453.3 billion for the same period a year earlier.
Moreover, its non-accrual rate spiked to 23.93% at Dec. 31, compared to 12.13% 12 months earlier. ResCap lost $981 million in the fourth quarter and $5.6 billion for the year. The loss comes despite the fact that it posted a $754 million gain on a debt swap with bondholders.
GMAC, on the other hand, earned $7.46 billion in the fourth quarter thanks to proceeds from its debt swap, which extinguished billions in liabilities. GMAC said that overall the debt swap improved its results by $11.4 billion. GMAC, partly owned by General Motors and Cerberus Capital, recently received $5 billion in TARP money.