Government-controlled finance company GMAC has hired Goldman Sachs to start the process of selling the company’s money-losing mortgage unit Residential Capital, The Post has learned.
What to do with ResCap has been an ongoing issue for GMAC, whose businesses are split between auto lending and mortgages, and whose ability to improve its finances has rested on being able to unload ResCap.
However, the struggling mortgage unit has been stuck in limbo for months as GMAC execs and the US Treasury — which owns a 56 percent stake in the parent firm — fight over the direction of the company.
With Goldman hired, it’s increasingly more likely that billionaire Warren Buffett might step up and buy ResCap. Indeed, the Berkshire Hathaway chief owns a sizable chunk of ResCap’s debt and has been interested for months in buying the lender.
“I think [GMAC is] finally getting its act together on ResCap,” said one person familiar with the matter.
A GMAC spokeswoman declined to comment.
The pursuit of a buyer comes as the committee overseeing how money from the Troubled Asset Relief Program is managed issued a scathing report on how the government has handled the GMAC bailout, saying “it is deeply concerned that Treasury has not required GMAC to lay out a clear path to viability or a strategy for repaying investors.”
Indeed, while Uncle Sam has injected some $17 billion into the company, there has been little discussion of if, when or how the company might pay back that cash. The TARP panel predicts taxpayers will lose $6 billion to $10 billion on the bailout.
Selling ResCap could help. According to the TARP panel’s report, GMAC has sunk $6.6 billion into the mortgage unit since 2007, after it began to stumble as a result of souring subprime mortgages. The report added that such help could not have been possible without TARP.
Meanwhile, GMAC is embroiled in changes. The company this week said Chief Financial Officer Robert Hull is resigning. In addition, Chief Executive Michael Carpenter will receive no cash compensation for 2010, and will instead be paid $9 million in stock, according to a Wall Street Journal report.