--Ocwen CFO says firm is interested in bidding on ResCap assets
--Nationstar is the stalking horse bidder for servicing rights to $374 billion of mortgages
--Apollo, BlackRock, Blackstone and TPG would be logical bidders - source
(Updates with more details about ResCap assets in paragraph 10 and about mortgage lawsuits in paragraph 26.)
By Andrew R. Johnson
Nationstar Mortgage Holdings Inc. (NSM) will likely face competition in its pursuit of Residential Capital LLC's mortgage assets, the bankrupt lender's chief executive said Thursday.
Also, ResCap isn't concerned that creditor demands for an independent examiner to review transactions between the lender and its parent, Ally Financial Inc., would yield any "surprises," Thomas Marano, chairman and chief executive officer of ResCap, said in an interview.
ResCap, once one of the country's largest subprime mortgage lenders, proposed selling servicing rights to $374 billion of mortgages and other assets to Nationstar last month in a $2.4 billion deal. The plan was included as part of ResCap's Chapter 11 bankruptcy filing on May 14.
Nationstar's "stalking horse" bid is subject to other offers, which could come from competing mortgage servicer Ocwen Financial Corp. (>> Ocwen Financial Corporation) and several private-equity firms, Marano said.
Marano said he has heard Ocwen plans to file a competing bid, and "some of the private equity funds are looking to come in as well."
"My gut is you're going to see some of the typical" names, Marano said, declining to name specific private-equity firms that he expects to make bids.
Apollo Global Management LLC (>> Apollo Global Management LLC), BlackRock Inc. (>> BlackRock, Inc.), Blackstone Group LP (>> The Blackstone Group L.P.) and TPG would be logical bidders for ResCap assets, a person familiar with the matter said.
Ocwen is interested in bidding on ResCap's assets, John Britti, chief financial officer of the mortgage servicer, wrote in an email Thursday.
"Based on the pricing we have seen in the bankruptcy filing, we see value," Britti wrote. "We also believe that creditors and regulators are likely to prefer seeing the portfolio broken into parts."
The assets Nationstar is bidding on include servicing rights to $201 billion of mortgages and subservicing rights to $173 billion of mortgages.
Ocwen, like Nationstar, has been bulking up its operations as traditional lenders exit the mortgage-servicing business due to upcoming changes in capital requirements and increased regulatory scrutiny.
Spokesmen for Apollo and Blackstone declined to comment. Representatives for BlackRock and TPG didn't immediately respond to requests for comment.
ResCap is proposing a Sept. 14 deadline for rival bids. If it receives any, an auction would be set for Sept. 25 at the Manhattan office of Morrison & Foerster LLP, ResCap's bankruptcy counsel. ResCap hopes to have a sale hearing by the end of October.
The company will ask a judge to approve its auction procedures at a June 18 hearing.
Despite potential competition, Nationstar is "uniquely qualified to do this deal," Marano said. "I do feel they are the best counterparty for the" government-sponsored enterprises.
Marano has led ResCap since 2008 and was previously a managing director for Cerberus Capital Management LP, which owns an 8.67% stake in Ally. He also was a senior managing director and head of mortgage and asset-backed securities at the former Bear Stearns & Co. Inc.
Nationstar, which is majority owned by Fortress Investment Group LLC (>> Fortress Investment Group LLC), is in the process of integrating a $63 billion servicing portfolio it is acquiring from Aurora Bank, which was part of Lehman Brothers Holdings Inc. On Monday, Nationstar said it was acquiring the servicing rights to $10.4 billion of mortgages from Bank of America Corp. (>> Bank of America Corp).
A representative for Nationstar didn't immediately respond to requests for comment Thursday.
Creditors are seeking to investigate how the proposed deal was structured as well as transactions ResCap and Ally conducted in prior years.
Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB), one of ResCap's largest creditors, on Monday filed a motion to appoint an independent examiner to review the companies' relationships before and after the bankruptcy. Among the transactions Berkshire wants examined is Ally's acquisition of ResCap's ownership stake in the holding company for Ally Bank in 2009.
"This and other transactions may give rise to various potential claims that Ally and affiliates have harvested assets from ResCap and seek a quick and easy divorce through bankruptcy," Berkshire said in its motion, which will be heard on June 18 before Judge Martin Glenn.
If the judge approves the appointment of an examiner, "we'll be fine with it," Marano said.
"I am confident that this company was operated in a separate and distinct manner," Marano said. "We got fairness opinions on all the meaningful transactions, and I don't think there's going to be anything ... problematic."
A spokeswoman for ResCap declined to say whether it plans to oppose Berkshire's motion.
Ally is also seeking a release from third-party claims over soured mortgage investments as part of ResCap's bankruptcy in an effort to sever itself from costly litigation that has prevented it from paying back a government bailout.
Mortgage insurers and investors have filed 27 lawsuits against affiliates of ResCap that are not part of the bankruptcy, including Ally Financial, Ally Bank and Ally Securities, ResCap said in a court filing last month. ResCap is seeking to delay suits against those parties, which it said would preserve the value of its estate.
Ally, the former in-house financing arm for General Motors Co. (GM), still owes $12 billion from a bailout it received during the financial crisis that topped $17 billion. It remains 74%-owned by the U.S. government.
-Joseph Checkler contributed to this article
Write to Andrew R. Johnson at firstname.lastname@example.org