NEW YORK (Bloomberg) -- Ally Financial Inc., the former GMAC lending unit that had its capital plan rejected last week by the Federal Reserve, agreed to sell its remaining agency mortgage servicing rights to Quicken Loans Inc. for about $280 million.
The loans had an unpaid principal balance of about $34 billion as of Jan. 31, the lender said today in a statement. The deal is expected to be completed in the second quarter, subject to approval by Fannie Mae and Freddie Mac, the firm said.
“Going forward, the bank’s full focus and resources will be centered on its leading direct banking franchise and advancing its customer-centric deposit activities, as well as continuing to grow its key role in Ally’s auto finance operation,” Barbara Yastine, 53, chief executive officer of the Ally Bank unit, said in the statement.
Ally, which received a $17.2 billion taxpayer bailout that left the U.S. Treasury Department with a 74 percent stake in the company, had its capital plan rejected by the Federal Reserve last week after regulators said the firm’s planning process and capital ratios didn’t meet standards. Ally is the surviving entity once known as GMAC, the former lending arm of General Motors.
Ally has disagreed with the Fed over the calculation of capital ratios, saying in a statement last week that it “continues to be a well-capitalized bank with a leading position in the market.”
The lender agreed March 12 to sell agency mortgage servicing rights to West Palm Beach, Fla.-based Ocwen Financial Corp. for about $585 million. Mortgage servicers handle billing and collections, and oversee foreclosures when borrowers don’t pay.
After Ally completes the transactions with Ocwen and Quicken Loans, it will have “exited all the non-strategic mortgage activities,” Yastine said in the statement.