Ally Financial Inc., the government-owned auto lender, says it is “actively considering” putting its troubled mortgage lending operation into bankruptcy The Detroit News reports.
The company may lose from $400 million to $1.25 billion.
Separately, Ally said ResCap losses tied to litigation and demands to repurchase soured mortgages could cost up to $4 billion more than existing amounts it has set aside for such matters.
“As a Result of ResCap’s current financial position, we believe ResCap’s ability to pay for any such losses is very limited,” Ally said in its quarterly report filed with the Securities and Exchange Commission.
Ally confirmed in a securities filing that its ResidentialCapitalLLCunit, known as ResCap, has few options to raise funds — and is seriously considering a bankruptcy filing.
ResCap accounts for about 10 percent of Ally’s business. ResCap, a wholly owned Ally subsidiary, may see its creditors attempt to go after other Ally assets.