Newcastle Investment Corp. (NCT), the mortgage-asset buyer run by Fortress Investment Group LLC (FIG), is “very optimistic” it will participate in a big investment in mortgage-servicing rights with other entities its manager oversees, Chairman Wesley Edens said.
Ally Financial Inc. (ALLY), the auto-lender majority-owned by U.S. taxpayers, has lined up Fortress, where Edens is co-chairman, to buy its Residential Capital unit in a bankruptcy court-supervised sale, a person familiar with the matter has said.
Newcastle is working on a possible transaction that’s “quite a large one that’s still very much pending, but we’re very optimistic it’s going to come to pass here in the next couple of days,” Edens said today on a conference call to discuss the company’s earnings. “There’s been a lot that has been reported” on the potential deal.
The real-estate investment trust, which is based in New York, has been partnering with Nationstar Mortgage Holdings Inc. (NSM), the servicer and lender taken public by Fortress in March, on investments in mortgage servicing rights since December. The companies have agreed to acquire the contracts on $63 billion of loans from a unit of bankrupt Lehman Brothers Holdings Inc.
“There’s a lot of interest in investing in the MSRs” across Fortress, and those acquired in the large deal would be divided among the “different capital that we manage,” Edens said.
Ally, formerly known as GMAC, received an oral commitment from Residential Capital bondholders to support a bankruptcy filing for the mortgage unit that could come early next week, according to people with direct knowledge of the talks, who declined to be identified because they aren’t public.
Ally ended last year as the fifth-largest residential mortgage servicer, overseeing $382.8 billion of loans, according to newsletter National Mortgage News. Gordon Runte, a Fortress spokesman, declined to comment.
Newcastle jumped 4.8 percent to a 14-month high of $7.22 in New York trading. Nationstar rose 2.9 percent to $14.42.
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