JSM Financial: GMAC to sell European mortgage business to Fortress Investment Group.

April 13, 2010 - PRLog -- JSM Financial has learned from sources close to the matter that GMAC LLC, the federally bailed-out U.S. bank holding firm that was previously the wholly owned financial services arm of General Motors has agreed to sell its European mortgage operations to the New York asset management firm Fortress Investment Group LLC, bringing it closer to its goal of withdrawing from the home lending business arena.

GMAC’s subsidiary, Residential Capital LLC is selling the assets and businesses which include both performing and non-performing mortgages, as well as securitizations of such assets, and represent about 10 percent of the unit’s holdings as of December, although they represent significantly more under the new accounting rules which came into effect in January this year.

The Detroit based GMAC’s mortgage operations lost $4 billion in the last quarter of 2009, prompting the firms CEO Michael Carpenter to refer to Residential Capital as a “millstone around the company’s neck”, JSM Financial believes.

In a statement available to JSM Financial the company indicated that it expected no material gain or loss from the deal which it is understood involves assets that the firm had already written down. Neither party was prepared to disclose the specific amount of the transaction but Fortress Investment did disclose in their statement that the purchase did include about 6,000 residential mortgage home loans.

“The agreements to sell the European mortgage assets and businesses are key steps toward our objective of reducing the ongoing exposure for GMAC from the legacy mortgage operation,” JSM Financial can confirm GMAC’s chief executive, said in the statement.

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