Mortgage lender Residential Capital is poised to reap billions in a bankruptcy auction of its assets next month, Reuters reported yesterday. Instead of being forced to hold a fire sale, ResCap has lined up high-profile bidders, including Fortress Investment Group's Nationstar Holdings and Warren Buffett's Berkshire Hathaway Inc., for an October 23 auction that could raise the money it needs to repay creditors. The key asset on the block is ResCap's mortgage loan servicing and loan origination business. The sale is expected to raise at least $4 billion, which will then become part of a pool of money used to pay back Ally and other investors, including those who bought mortgage-backed securities tied to ResCap home loans that went bad.
