Mortgage Division Filing Chapter Eleven
The mortgage division of a company which used to be the financing arm of General Motors Company is filing for bankruptcy protection. Ally Financial's mortgage division is known as Rescap.The government-owned lender had reportedly been considering a chapter eleven filing for Rescap for some time.
Industry analysts say the mortgage division of Ally has been weighed down by old, souring loans. Ally, which was the financing arm of General Motors Company, says it is also looking at strategic options for all of its international operations. Auto finance, insurance, and banking operations in South America, Europe, and Canada could be impacted by those strategies.
Ally says it has re-paid more than five billion dollars to the U-S Treasury Department. However, Ally received more than 16 billion dollars in government rescue packages.