Nationstar Leads Bidding for ResCap Mortgage Assets (10/23/12)
By ANDREW R. JOHNSON Nationstar Mortgage Holdings Inc. submitted a $2.67 billion bid at a bankruptcy auction for the mortgage assets of Residential Capital on Tuesday afternoon, topping a bid by Ocwen Financial Corp., people attending the auction said.
Nationstar's bid tops a bid of $2.65 billion by Ocwen, whose offer also includes a $24 million break-up fee it would pay to Nationstar as part of the bankruptcy auction. Nationstar had earlier bid $2.64 billion, according to a person familiar with the matter.
The auction started Tuesday morning at the Sheraton New York Hotel and could last multiple days. The figures were from a recent round of bidding in the auction and could be subject to change.
Nationstar, majority-owned by private-equity firm Fortress Investment Group LLC, was designated as the "stalking horse" bidder for ResCap's assets earlier this year by the U.S. Bankruptcy Court.
The companies are competing for ResCap's mortgage-servicing and -origination platform, which includes the rights to service 2.4 million mortgages that account for $374 billion in unpaid balances.
They are the only two bidders competing for the assets, these people said.
ResCap, the mortgage subsidiary of Ally Financial Inc., filed for Chapter 11 bankruptcy protection in May as bond payments loomed and mortgage-securities litigation mounted. Ally, which isn't part of the bankruptcy, hopes to sever itself from those matters so it can focus on repaying a U.S. government bailout that topped $17 billion.
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