The agreement covers loans serviced by ResCap subsidiary GMAC Mortgage on behalf of Fannie Mae prior to June 30 and all mortgaged-backed securities that Fannie Mae purchased at various times prior to the settlement, including private-label securities, Ally said Monday.
The settlement releases ResCap and its subsidiaries from about $292 billion in potential repurchases, Ally said.
“At the start of 2010, we set a goal to substantially reduce risk in our mortgage operation and, during the last 12 months, we have successfully completed a series of steps toward that objective and are largely complete,” said Ally CEO Michael A. Carpenter. “This agreement, along with prior repurchase settlements with Freddie Mac and others and the sale of legacy assets and operations, has significantly reduced Ally’s risk related to the legacy mortgage business going forward,” he said in a press statement.
ResCap CEO Thomas Marano said the firm will “focus predominantly on the origination and servicing of conforming mortgages” going forward. ResCap’s subsidiary, GMAC Mortgage, originates and services residential mortgages under the GMAC Mortgage and ‘ditech’ brand names.
Ally said the settlement “was modestly in excess of reserves previously taken.”