ResCap bankruptcy puts pressure on NY borrowers

TRD 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
Tillary Hotel at 85 Flatbush Avenue (Image via Kutnicki Bernstein Architects)

Isaac Hager’s Downtown Brooklyn hotel heads to foreclosure

Isaac Hager’s Downtown Brooklyn hotel heads to foreclosure
A million homeowners haven’t requested forbearance on their mortgages — and are now at risk for foreclosure and eviction. (iStock)

1M struggling homeowners didn’t request forbearance. Now what?

1M struggling homeowners didn’t request forbearance. Now what?
U.S. foreclosure filings in August jumped 11% as some states ended relief measures, though continued government intervention has prevented sharper increase (iStock)

US foreclosure filings jump as some states end relief measures

US foreclosure filings jump as some states end relief measures
30-77 Vernon Boulevard in Queens and Cape Advisors CEO Craig Wood (left) and 720 West End Avenue in Manhattan with Brack Capital Real Estate CEO Ariel Podrojski (right) (Images via Cape Advisors; Google Maps; LinkedIn)

The biggest loans of the slowest month: August’s real estate lending

The biggest loans of the slowest month: August’s real estate lending
FHFA director Mark Calabria (Getty; iStock)

Fannie and Freddie extend eviction, foreclosure moratorium

Fannie and Freddie extend eviction, foreclosure moratorium
Clockwise from top: Savanna's Christopher Schlank with 1375 Broadway, a rendering of 40 10th Avenue and 109 East 79th Street with Victor Sigoura (Google Maps; Getty; rendering via 40tenthave)

These were the largest Manhattan real estate loans in July

These were the largest Manhattan real estate loans in July
Matthew Kramer, Victor Petrescu, Sebastian Jaramillo and Gov. Ron DeSantis (Getty, iStock) 

Eviction, foreclosure freeze in Florida delaying inevitable flood of cases

Eviction, foreclosure freeze in Florida delaying inevitable flood of cases
The Palisades Center and Pyramid Management Group CEO Steve Congel (Google Maps)

Palisades Center Mall operator avoids financial calamity (for now)

Palisades Center Mall operator avoids financial calamity (for now)
arrow_forward_ios

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

Loading...