The Detroit-based lender, which is now owned by the US government, plans to return to focusing on its traditional business of domestic car loans.
The sale represents about 10% of ResCap’s assets, according to a GMAC statement. ResCap held about $19.3bn in assets at the end of December, GMAC said in a February presentation. No gain or loss is expected from sale to Fortress.
“The agreements to sell the European mortgage assets and businesses are key steps toward our objective of reducing the ongoing exposure for GMAC from the legacy mortgage operation,” said GMAC chief executive Michael Carpenter.
Following catastrophic losses on sub-prime mortgages, which necessitated three bailouts to the tune of $17.3bn in total, GMAC is looking to return to profitability by concentrating on auto finance. The company took a charge of $1.3bn in the fourth quarter of 2009 when it marked down most of its international mortgage assets in preparation for their sale.
The sale includes some of the $13bn in off-balance sheet mortgage assets that accounting rules forced GMAC to count as part of total assets starting this year. If all of those were added to the ResCap balance sheet, Fortress may have picked up as much as $12.9bn in assets in the purchase.
According to Fortress, the deal includes ResCap’s mortgage platforms in the UK, Germany and the Netherlands. The transaction will include loan assets, non-performing loans and servicing rights, plus stakes of operating entities in those three countries.
Fortress said it was also acquiring 6,000 residential mortgages. GMAC said it sold its UK mortgages for $177m, without naming the buyer, and that more loan sales are in progress. The company consulted with potential buyers when valuing and marking down the international mortgage assets at the end of last year.
