Ally Financial Inc. is worried that the proposed sale of Residential Capital LLC's mortgage-servicing platform might hamstring ResCap's promise to abide by the terms of a landmark national mortgage settlement, Dow Jones Daily Bankruptcy Review reported today. Ally, ResCap's government-controlled parent, on Friday expressed concerns about whether Nationstar Mortgage LLC would fulfill ResCap's obligations under the settlement if it wins a coming auction for the bankrupt company's mortgage-servicing portfolio. Nationstar, a subsidiary of Fortress Investment Group, has been named the lead bidder in that contest, with a $2.5 billion bid. According to Ally, the tentative sale deal with Nationstar does not spell out that the prospective purchaser will "honor and perform all of the debtors' obligations" under a settlement the nation's largest mortgage lenders struck with the Department of Justice and scores of state attorneys general over alleged violations in mortgage origination and foreclosure practices. Ally said that it will not back the transaction unless ResCap's settlement responsibilities are preserved.
