Residential Capital LLC, the mortgage company liquidating assets in bankruptcy, delayed closing the $3 billion sale of its main business to Ocwen Loan Servicing LLC to Feb. 15, a lawyer said today.
The extra time will allow ResCap and government-owned mortgage investor Freddie Mac to complete a proposed agreement needed to clear the last major obstacle to the sale, ResCap lawyer Todd M. Goren said in federal court in Manhattan today.
The company expects to close on Jan. 31 the part of sale involving Green Tree Servicing LLC, a unit of Walter Investment Management, Goren said. Ocwen and Green Tree won an auction for ResCap’s loan servicing unit last year with a bid of $3 billion.
When the Green Tree part of the sale closes, ResCap will repay $400 million owed on a so-called debtor-in-possession loan the company took out to fund its bankruptcy, Goren said. The closing will also “bring in hundreds of millions of dollars,” Goren told U.S. Bankruptcy Judge Martin Glenn in a hearing today.
New York-based ResCap filed bankruptcy in May to with plans to sell its major assets and resolve legal claims related to mortgage loans. The company is owned by Ally Financial Inc., a Detroit-based auto lender majority owned by U.S. taxpayers.
The $1.5 billion sale of ResCap’s main loan portfolio to Berkshire Hathaway Inc. should also close as planned on Jan. 31, Goren said.
The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).