Posted on 10/25/2012 5:34:34 PM PDT by campg
WATERLOO, Iowa --- Nearly 1,000 Waterloo jobs may be on the line in the wake of a decision by bankrupt mortgage company Residential Capital LLC, the parent company of GMAC Mortgage, to sell assets to two firms for $3 billion.
On Wednesday the board of directors of New York-based ResCap granted preliminary approval to a $3 billion bid from the team of Ocwen Loan Servicing LLC and Walter Investment Management Corp. for the company’s mortgage servicing and origination business.
ResCap and 50 of its subsidiaries filed for Chapter 11 bankruptcy protection in May. The bankruptcy court will consider the proposed sale at a hearing Nov. 19 in New York.
The company employs about 950 workers at 3451 Hammond Ave.
According to a CNN.com story, Ocwen is becoming a major player in the mortgage-servicing industry and has moved “virtually every American job” in companies it buys offshore.
As of today, there is no word on the fate of Waterloo’s GMAC workers, according to ResCap.
“At this time, no decisions have been made about staffing levels in any GMAC Mortgage locations,” ResCap spokeswoman Susan Fitzpatrick said in an email. “We will continue to work with all parties involved to ensure the best possible outcome for its creditors and other stakeholders.”
Katarina Wenk-Bodenmiller of Sommerfield Communications Inc. in New York, of which Ocwen is a client, said she had no statement from the company.
As of March 31, ResCap was servicing more than 2.4 million mortgage loans worth about $374 billion, the company said. About 68 percent of the loans are owned by Fannie Mae, Freddie Mac or Ginnie Mae.
A source familiar with Fannie Mae policy who asked not to be identified said the government-sponsored corporation is concerned about offshoring jobs that service its loans. The source said Fannie Mae strongly prefers such jobs stay in the U.S., although the agency has no control over keeping them in a particular place.
Fannie Mae spokesman Andrew Wilson said he was not aware of any plans to move jobs out of Waterloo.
“Fannie Mae will work with the winning bidders and ResCap on a transition plan on the Fannie Mae loans that were purchased,” he said.
Accepting a bid in this type of situation is a matter of satisfying creditors and not about jobs gained or lost, said former state senator Tom Fiegen, a Cedar Rapids bankruptcy attorney.
“I don’t think the creditor body cares much where the jobs are; I think they’re looking to get what they can out of the bankruptcy estates,” Fiegen said.
The sale is subject to bankruptcy court approval, ResCap said in a news release.
“What the court is going to do is look to the creditors,” Fiegen said. “Normally in a case like this, there are various committees appointed on behalf of unsecured creditors, bondholders , etc. The court is going to look at: ‘What do the creditors say?’”
ResCap is a subsidiary of Ally Financial Inc. Its executive offices are located in New York, and it has major operations in Fort Washington, Pa., Minneapolis, Dallas and Burbank, Calif., in addition to Waterloo.
But hiring more teachers and building roads and bridges will fix the economy.
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