Wells Fargo Reaches Deal With ResCap Over Toxic Mortgages

Wells Fargo & Co. has reached a settlement tied to bad real-estate loans that officials at Residential Capital LLC claim helped push the subprime mortgage lender into bankruptcy, said people familiar with the matter.

The bank reached the agreement with the trust overseeing ResCap’s liquidation, according to court documents and the people familiar. The settlement punctuates a forgettable 2016 for Wells Fargo, which has suffered through a scandal around its creation of bogus customer accounts and new regulatory sanctions over the rejection of its so-called living will.

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Ally Financial to pay $52 million in ResCap toxic mortgage bond settlement

Ally Financial will pay $52 million to settle allegations that one of its subsidiaries,Residential Capital (also called ResCap), knowingly marketed mortgage bonds despite the fact that the underlying mortgages were toxic, the U.S. Attorney’s Office announced Monday.

The settlement stems from 10 subprime residential mortgage-backed securities issued in 2006 and 2007.

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Judge denies dismissal of ResCap mortgage lawsuit

A New York bankruptcy judge on Tuesday did not dismiss four lawsuits brought by the Residential Capitalbankruptcy trust, alleging mortgage originators including UBS Real Estate Securities and SunTrust Mortgage sold billions of dollars in defective loans. PerLaw360:

The mortgage lenders were accused of selling residential mortgage loans with faulty underwriting that ResCap then packaged and resold, the article said.

“Substitution of the trust as the real party in interest to pursue these adversary proceedings is appropriate,” Judge Glenn wrote in the published opinion. “First, even if RFC lacked standing to file the original complaints against SunTrust and UBS, such defective standing would constitute an honest mistake, since there is no indication that RFC or the plaintiff acted in bad faith.”

The article noted that the judge did dismiss breach of contract claims for loans purchased by RFC before May 2006, ruling they were untimely.

Source: Law360

ResCap sues 12 lenders, alleging bad loans bankrupted company

ResCap sues 12 lenders, alleging bad loans bankrupted company

It appears that Residential Capital has decided not take its bankruptcy lying down. The company, which was once one of the largest mortgage servicers in the country, has filed lawsuits against 12 lenders that originated “poor quality” loans that ResCap purchased and securitized.

On Tuesday, the company filed lawsuits against the following in U.S. Bankruptcy Court in New York:

• Bank of America
• Summit Financial
• Synovus Mortgage Corp.
• Primary Capital Advisors
• Cadence Bank 
• Mortgage Investors Group
• Honor Bank 
• First Mariner Bank 
• CMG Mortgage 
• Citizens First Wholesale Mortgage 
• RBC Mortgage Company
• PHH Mortgage Corp. 

ResCap Sues BofA, RBC Mortgage Over ‘Defective’ Loan Sales

ResCap Sues BofA, RBC Mortgage Over ‘Defective’ Loan Sales

Residential Capital LLC, the defunct mortgage company, sued Bank of America NA, RBC Mortgage Co. and other lenders, claiming they sold it poor-quality loans that led to its bankruptcy.

ResCap filed for bankruptcy protection in May 2012 after investors who bought mortgage-backed bonds claimed they were loaded with faulty loans. It was liquidated to resolve more than $100 billion in potential lawsuits.

In lawsuits filed yesterday in U.S. Bankruptcy Court in Manhattan, ResCap said it’s seeking to recover “billions of dollars in liabilities and losses” over the “defective” loans. It wants the banks held responsible for more than 24 lawsuits alleging ResCap securitized bad loans, as well as for hundreds of claims, including securities fraud and breach of warranty, that it faced in bankruptcy.

ResCap, GMAC Agree To Pay $2M To End Wage Class Action

ResCap, GMAC Agree To Pay $2M To End Wage Class Action

Law360, New York (April 14, 2014, 4:24 PM ET) — GMAC Mortgage LLC and bankrupt Residential Capital LLC have agreed to pay $2 million to settle a wage-and-hour class action alleging they stiffed workers on proper meal and rest breaks in violation of the Fair Labor Standards Act, according to documents filed in Washington federal court.

ResCap to Pay $230M to End Foreclosure Reviews

ResCap to Pay $230M to End Foreclosure Reviews

Residential Capital has won court permission to set aside $230 million for payments to homeowners whom the company may have foreclosed on improperly.

The former subprime mortgage unit of Ally Financial has received approval to enter into an agreement with the Federal Reserve Board that would end regulatory review of its foreclosure practices, Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan ruled on Wednesday.

Ally Financial fights with ResCap over foreclosure review

Ally Financial fights with ResCap over foreclosure review

Government-owned lender Ally Financial Inc. is sparring with its Residential Capital mortgage subsidiary over the unit’s efforts to get out of a federal foreclosure-review program.

ResCap, which is in Chapter 11 bankruptcy, said Ally would be on the hook for any amount of restitution the Federal Reserve is unable to recover from ResCap under the terms of an agreement Ally entered into with the U.S. government in 2011, according to a filing in U.S. Bankruptcy Court Friday.

Ally Financial’s ResCap Wants to End Foreclosure Review Process

Ally Financial’s ResCap Wants to End Foreclosure Review Process

Residential Capital LLC, the mortgage subsidiary of government-owned lender Ally Financial Inc., wants a bankruptcy judge’s assurance that the Federal Reserve and other government agencies can’t force it to continue conducting foreclosure reviews under a 2011 agreement.

Read more: http://www.foxbusiness.com/news/2013/02/28/ally-financial-rescap-wants-to-end-foreclosure-review-process/#ixzz2MGOMjaMs

U.S. Opposes ResCap Bonus Plan

U.S. Opposes ResCap Bonus Plan

The U.S. Government is objecting to a proposal by Residential Capital to pay roughly $33.4 million in annual bonuses to employees.

ResCap, the subprime mortgage unit of Ally Financial that has operated under bankruptcy protection since May, asked the court on Dec. 26 to authorize the company to pay the awards to roughly 3,000 of its 3,926 employees from funds the company has set aside.

“Providing employees with an annual discretionary payment that has historically comprised a portion of their annual compensation is a normal component of conducting business and essential to conducting the debtors’ businesses, which rely heavily on consistent leadership, familiarity with complex financial assets, and regular interaction with sophisticated governmental agencies,” lawyers for ResCap wrote in papers filed with the U.S. Bankruptcy Court in Manhattan.