Ally Financial is "absolutely not" looking to sell its core U.S auto lending business as it seeks ways to pay back $12 billion it owes to U.S. taxpayers after a government-funded bailout during the financial crisis, the company's CEO said yesterday, Reuters reported. Ally, the former in-house financing arm for General Motors Co. once known as GMAC, on Monday announced plans to sell some international operations at the same time that its Residential Capital (ResCap) mortgage unit filed for bankruptcy protection. ResCap received court approvals at a court hearing yesterday that will allow it to stay in business while in bankruptcy. Under its bankruptcy plan, ResCap will be able to preserve its mortgage servicing operations and other assets pending their planned sales. At the same time, the bankruptcy judge overseeing the hearing raised questions about the mortgage lender's plans to halt all home equity loans to its retail customers while in chapter 11. ResCap attorney Lorenzo Marinuzzi said in court that the company cannot afford the possible total payout of $400 million if the outstanding home equity lines were drawn down.
