Ally Financial Inc. reached a deal to avoid creditor lawsuits related to the company’s bankrupt mortgage arm, Residential Capital LLC, said Howard Seife, a lawyer for the court-appointed examiner investigating the two companies’ pre-bankruptcy relationship.
The U.S. Treasury Department, which put $17.2 billion into a bailout of Ally Financial Inc., would prefer a breakup and sale of the lender because an initial public offering may not succeed, according to people familiar with the matter.
Quicken Loans Inc. head William Emerson, whose online home lender is buying mortgage servicing rights from Ally Financial Inc., said higher interest rates won’t damp housing’s recovery and his industry will benefit from refinancings if the economy cools.
Ally Financial Inc ., the U.S.-owned lender preparing for an initial public offering, is bolstering ties to General Motors Co . dealers amid signs the automaker may become a rival in vehicle financing.
Ally Financial Inc., the home and auto lender majority owned by U.S. taxpayers, will cease underwriting and trading mortgage-backed securities at its broker-dealer and dismiss most of its 33 traders and analysts.
A third-party monitor may be required as part of any settlement of a probe by 50 state attorneys general to ensure that banks comply with foreclosure practices, Connecticut Attorney General George Jepsen said.
Bank of America Corp. , ordered to return $500 million in deposits to Lehman Brothers Holdings Inc. and pay $90 million in interest, said it didn’t act with “maliciousness” and shouldn’t have to pay damages greater than $1.3 million of Lehman’s costs for litigating the case.
Bank of America Corp., JPMorgan Chase & Co. and three other banks agreed to pay $25 million to New York to resolve some monetary claims over the use of a mortgage database after reaching a $25 billion national settlement over foreclosure practices.