""Ally Bank"":http://www.ally.com/ announced it has launched a ""process to explore strategic alternatives for its agency mortgage servicing rights (MSR) portfolio and its business lending operations.""[IMAGE]
The direct banking subsidiary of Ally Financial Inc. pushed for its mortgage lending unit, Residential Capital (ResCap), to declare bankruptcy earlier this year. A bankruptcy auction was held for ResCap's portfolio this week. ""Ocwen"":http://www.ocwen.com/ acquired the MSR with a ""$3 billion bid"":https://themreport.com/articles/ocwen-wins-auction-to-buy-out-rescap-portfolio-2012-10-26.
The announcement signals another step in Ally's shift away from the housing market. In November 2011, the bank began to reduce its correspondent originations business to focus on a smaller group of strategic clients, and in July 2012, it announced its intent to exit the warehouse lending business by the end of the year. By selling its lending business, Ally also hopes to speed up its repayment of government bailout money totaling $17 billion.
Ally's agency MSR portfolio had an unpaid principal balance of approximately $122 billion in Q3.
In a statement, Ally president and CEO Barbara Yastine said the bank's goal going forward is to focus in its banking and auto finance operations.
""After careful consideration, the decision was made to explore alternatives for the agency MSR portfolio and the business lending operation as they are no longer strategic activities for the Bank,"" Yastine said. ""We are focused on exploring the best option for these activities going forward.""
Ally will continue to originate for its own portfolio ""a modest level of high-quality residential jumbo mortgages"" through correspondents and wholesale brokers, the bank said.