Next Thursday I will travel to New York City to see another chapter in the misery-filled saga that is the destruction of the American Middle Class play out in federal bankruptcy court.
GMAC/Rescap filed bankruptcy and they’re carving up the pieces….and serving up the choicest slices for the insider investors and Wall Street titans that run the game.
Of course if you’re an ordinary Amerikan (you know one of the ones that continues to bail out Wall Street and the banks), don’t count on getting any real support…and don’t for a minute think there’s any bailout heading your way. GMAC continues to roll right ahead throwing Americans into the street and failing to provide appropriate modifications:
Documents obtained by ProPublica””government audit reports of GMAC, the country’s fifth-largest mortgage servicer””provide the first detailed look at the program’s oversight. They show that the company operated with almost no oversight for the program’s first eight months. When auditors did finally conduct a major review more than a year into the program, they found that GMAC had seriously mishandled many loan modifications””miscalculating homeowner income in more than 80 percent of audited cases, for example. Yet, GMAC suffered no penalty. GMAC itself said it hasn’t reversed a single foreclosure as a result of a government audit.
And just read details of the bankruptcy:
One of Ally’s biggest creditors at that time was Mr. Buffett’s Berkshire Hathaway, which held more than $500 million of ResCap’s unsecured bonds and $900 million in ResCap’s junior secured bonds. Berkshire has since sold the unsecured bonds but has also joined the fray. It announced in June that it would bid for the mortgage servicer, and offer $1.45 billion for the legacy loan portfolio. The investment firm Lone Star Funds has also stated its interest in buying one or both.
Ally has now bowed out and Berkshire has replaced it as the stalking bidder for the loan portfolio. This fall, a bankruptcy court will hold an open auction for both businesses. We don’t know who will buy these businesses, but it won’t be Ally, which has left the scene after losing billions.
When asked for comment on why it was no longer bidding, an Ally spokesman expressed the intention for Ally to focus on its core businesses where Ally has a ” leading position and competitive strengths, and that includes the auto finance and direct banking franchises.”
Ally’s initial gambit as a stalking horse bid has succeeded in bringing bidders to the table and maximizing the value of ResCap. But it’s hard not to think that if Ally were not a ward of the government, this might have turned out differently. Having come so far and invested more than $10 billion, Ally might want to bid for those assets, using its prior ownership to gain an advantage. After all, now there appears the potential to profit.
Americans have no idea just how bad a deal the American Home Mortgage Servicing bankruptcy was for them….and the GMAC situation may get real bad….
I have two American Home Mortgage Servicing cases on appeal right now…stay tuned to those…and the gmac bankuptcy….remember, CLAIMS BAR DATE IS FAST APPROACHING!