GMAC Stops Taking Mortgage Aps


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GMAC Mortgage is no longer accepting mortgage applications, its loan origination business having been sold by its parent company, according to a notice on the company's web site.

Under the heading "Changes at GMAC Mortgage," the notice states that the company will no longer be accepting new loan applications, effective Feb. 1, 2013. It says the company's mortgage origination business will be operating under new ownership.

Loan applications that were submitted prior to Feb. 1 will continue to be processed, according to the notice.

Servicing operations being transferred

Some of the mortgages serviced by GMAC have also been sold and will be transferred to a new servicer, according to the notice. Borrowers will receive a letter from their new servicer with details of the new arrangement.

GMAC Mortgage is a subsidiary of Residential Capital LLC (ResCap), which in turn is a subsidiary of Ally Financial. According to a statement from Residential Capital, the company's mortgage origination business and servicing rights to Fannie Mae-backed loans have been sold to Walter Investment Management.

A sale of other servicing operations and related assets to Ocwen Loan Servicing, LLC, is still pending.

Still owes billions to taxpayers

Ally Financial was formerly known as GMAC (General Motors Acceptance Corporation), originally the in-house auto lender for GM. The company changed names in 2010, though the name GMAC Mortgage continued to be used for its home loan operations.

The U.S. government holds a 74 percent interest in Ally, acquired in concert with the larger bailout of GM and Chrysler. Ally still owes the government some $14.6 billion, according to the U.S. Inspector General, out of an original $17.2 billion in assistance provided to keep its auto loan operations afloat in the wake of losses incurred through its home loan operations.

ResCap filed for Chapter 11 bankruptcy in May 2012 and Ally has been seeking to divest itself of its mortgage subsidiary since then.

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This article appears in: Personal Finance , Banking and Loans

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