U.S. Trustee Tracy Hope Davis said in court papers filed yesterday that Residential Capital LLC needs to do more to ensure it is protecting consumer privacy for homeowners under bankruptcy law in the sales of its mortgage loan and servicing businesses, Reuters reported yeterday. Davis also challenged the potential break-up fee and other parts of an auction process for those businesses, saying that they would discourage bidders from participating. ResCap, the mortgage unit of Ally Financial, filed for bankruptcy in May with a plan to sell its mortgage servicing business for about $2.4 billion to Nationstar Mortgage Holdings, owned by Fortress Investment Group. It also plans to sell some mortgage loans to Ally for about $1.4 billion.
