ResCap bankruptcy puts pressure on NY borrowers

New York /
May.May 21, 2012 01:30 PM

New Yorkers struggling through the foreclosure process will experience even more difficulty modifying their loans after Ally Financial’s Residential Capital filed for bankruptcy last Monday, the New York Post reported. Declaring Chapter 11 bankruptcy put an automatic freeze on the government-backed lender’s loan negotiations with consumers. Of ResCap’s 2.4 million consumer mortgages, 120,000 are in New York and those attempting to alter their loans now must do so in court.

“Ally’s goal is to get out of the mortgage business and wash their hands of it,” said Guy Cecala, publisher of Inside Mortgage Finance. “The sooner Ally can do that, the better [for Ally], but that doesn’t necessarily benefit the borrower.”

The bank will continue to operate as it liquidates assets, but that also means that homeowners negotiating a foreclosure settlement deal or loan modification may be forced to start their application process over after Ally sells its servicing rights.

ResCap denies that bankruptcy will affect their ability to satisfy their trustees and creditors. “The Chapter 11 filings should have no impact on our ability to help keep families in their homes and assist borrowers in distress,” a ResCap spokesperson said. [Post]


Related Articles

arrow_forward_ios
Miami-Dade Mayor Daniella Levine Cava (Getty, iStock)
Miami-Dade resumes pre-pandemic evictions after unannounced February break
Miami-Dade resumes pre-pandemic evictions after unannounced February break
Development site for Marker 27.  (Marketing materials from Rosewood Realty Group obtained by The Real Deal  /  Drone Photo by Frank Galasso, Vertical Media)
To stop foreclosure, Westchester condo developer files for bankruptcy
To stop foreclosure, Westchester condo developer files for bankruptcy
TRD Tips: How to manage when you’re a landlord late on the loan
TRD Tips: How to manage when you’re a landlord late on the loan
TRD Tips: How to manage when you’re a landlord late on the loan
117 Northeast First Avenue (Getty, Gut Miami via Twitter)
Lender sues owners of downtown Miami WeWork building over allegedly unpaid loan
Lender sues owners of downtown Miami WeWork building over allegedly unpaid loan
161 Maiden Lane, Fortis CEO Jonathan Landau and Bank Leumi CEO Avner Mendelson (Hill West Architects; Fortis; Bank Leumi)
“Leaning” Seaport condo facing foreclosure on $120M loan
“Leaning” Seaport condo facing foreclosure on $120M loan
Denizen Bushwick at 54 Noll Street (Photo via Google Maps)
All Year Management in default on $170 million Brooklyn mortgage
All Year Management in default on $170 million Brooklyn mortgage
CIM Group's Shaul Kuba and HFZ Capital's Ziel Feldman (Getty)
Foreclosures tied to 4 HFZ condo buildings halted, for now
Foreclosures tied to 4 HFZ condo buildings halted, for now
(iStock)
Foreclosure filings are way down. There’s a reason
Foreclosure filings are way down. There’s a reason
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...