Will Ally Hit a Home Run?

Early next week Ally Financial will release its fourth quarter results and chances are the government owned mega bank will post some decent results in its mortgage division. What are we basing this prediction on? Well, first off, Residential Capital Corp. (the mortgage unit) is a top ranked correspondent buyer of home mortgages, a sector in which profit margins have been particularly strong. Yes, it's true that gain-on-sale profits slipped a bit in December but October and November were exceeding strong. But the big number to watch will be ResCap's servicing portfolio. Earlier this week PHH Mortgage announced that it marked up its housing receivables by a whopping $287 million in 4Q. ResCap services more than twice as many loans as PHH. Then again, PHH never went hog wild into subprime and HELOCs like GMAC/ResCap did. But ResCap (unlike some bank owned firms) has moved aggressively to dump its problem loans and strike settlements on buybacks…