GMAC ResCap
 | |
| Subsidiary | |
| Industry | Financial Services |
| Fate | Bankruptcy as part of Chapter 11 liquidation |
| Defunct | December 17, 2013 |
| Headquarters |
Minneapolis, Minnesota, United States |
| Products | Mortgages |
Number of employees | 14000 |
| Parent | Ally Financial |
| Website |
www |
GMAC ResCap (Residential Capital) was a financial service company that focuses on residential estate loans that went bankrupt in 2013. It was part of General Motors' finance group GMAC which was then taken over by Ally Financial. Its corporate headquarters were in Minneapolis, Minnesota. Its subsidiaries include GMAC Mortgage and online home lender Ditech.
History
The company was founded in 1982 as a subsidiary of General Motors' GMAC.
On May 15, 2012, Ally put the company into bankruptcy. ResCap posted a $402 million loss in 2011 and had missed a $20 million payment on unsecured debt on April 17, 2012. ResCap listed $10.9 billion in mortgages on December 31, 2012, after wiping $22 billion in mortgages off its books in 2009, 2010 and 2011. The company had booked a substantial number of subprime mortgages. The bankruptcy was seen as a step by Ally to exit the mortgage business to focus on its profitable auto loan and direct banking business.[1][2]
On December 17, 2013, the company went out of business as per its Chapter 11 liquidation filing under bankruptcy.[3]
Business operations
The business had operations in the United States, Canada, Mexico, Brazil, United Kingdom, Germany, Netherlands, Spain and Australia.
Litigation
In February 2015, Citigroup, Goldman Sachs Group and UBS AG agreed to a $235 million settlement stemming from residential mortgage-backed securities (RMBS) issued by the defunct Residential Capital LLC (ResCap) and underwritten by the three financial institutions . The ResCap RMBS were issued before the sub-prime mortgage crisis, and the lawsuit dates from 2008. The lawsuit alleged that the prospectuses and registration statements issued by Citigroup, Goldman Sachs and UBS did not adequately disclose the risk of the RMBS and were, in fact, misleading to investors, who sustained heavy losses. The lawsuit alleged that the behavior of the three defendants violated securities law.[4]
References
- ↑ "Former GMAC puts mortgage unit in bankruptcy". Content.usatoday.com. 2012-05-14. Retrieved 2012-05-20.
- ↑ Curan, Catherine (2012-05-16). "ResCap goes broke, families go to limbo". NYPOST.com. Retrieved 2012-05-20.
- ↑ "Company Overview of GMAC ResCap, Inc.". Bloomberg BUsinessweek. Retrieved May 20, 2014.
- ↑ "Goldman, Citi, UBS Shell Out $235M to Settle RMBS Suit - Analyst Blog". Yahoo! Finance. Retrieved 24 February 2015.
