WATERLOO, Iowa --- Nearly 1,000 Waterloo jobs may be on the line in the wake of a decision by bankrupt mortgage company Residential Capital LLC, the parent company of GMAC Mortgage, to sell assets to two firms for $3 billion.

On Wednesday the board of directors of New York-based ResCap granted preliminary approval to a $3 billion bid from the team of Ocwen Loan Servicing LLC and Walter Investment Management Corp. for the company’s mortgage servicing and origination business.

ResCap and 50 of its subsidiaries filed for Chapter 11 bankruptcy protection in May. The bankruptcy court will consider the proposed sale at a hearing Nov. 19 in New York.

The company employs about 950 workers at 3451 Hammond Ave.

According to a CNN.com story, Ocwen is becoming a major player in the mortgage-servicing industry and has moved “virtually every American job” in companies it buys offshore.

As of today, there is no word on the fate of Waterloo’s GMAC workers, according to ResCap.

“At this time, no decisions have been made about staffing levels in any GMAC Mortgage locations,” ResCap spokeswoman Susan Fitzpatrick said in an email. “We will continue to work with all parties involved to ensure the best possible outcome for its creditors and other stakeholders.”

Katarina Wenk-Bodenmiller of Sommerfield Communications Inc. in New York, of which Ocwen is a client, said she had no statement from the company.

As of March 31, ResCap was servicing more than 2.4 million mortgage loans worth about $374 billion, the company said. About 68 percent of the loans are owned by Fannie Mae, Freddie Mac or Ginnie Mae.

A source familiar with Fannie Mae policy who asked not to be identified said the government-sponsored corporation is concerned about offshoring jobs that service its loans. The source said Fannie Mae strongly prefers such jobs stay in the U.S., although the agency has no control over keeping them in a particular place.

Fannie Mae spokesman Andrew Wilson said he was not aware of any plans to move jobs out of Waterloo.

“Fannie Mae will work with the winning bidders and ResCap on a transition plan on the Fannie Mae loans that were purchased,” he said.

Accepting a bid in this type of situation is a matter of satisfying creditors and not about jobs gained or lost, said former state senator Tom Fiegen, a Cedar Rapids bankruptcy attorney.

“I don’t think the creditor body cares much where the jobs are; I think they’re looking to get what they can out of the bankruptcy estates,” Fiegen said.

The sale is subject to bankruptcy court approval, ResCap said in a news release.

“What the court is going to do is look to the creditors,” Fiegen said. “Normally in a case like this, there are various committees appointed on behalf of unsecured creditors, bondholders , etc. The court is going to look at: ‘What do the creditors say?’”

ResCap is a subsidiary of Ally Financial Inc. Its executive offices are located in New York, and it has major operations in Fort Washington, Pa., Minneapolis, Dallas and Burbank, Calif., in addition to Waterloo.

Business Editor at The Courier

(21) comments

GloriaJL
GloriaJL

Ocwen is a company headquartered offshore to avoid taxes. They outsource all their jobs to India. Why on earth should the the government (through Fannie and Freddie) pay loan servicing fees to a company that won't even pay taxes here. Everyone should be contacting their congressmen to stop this now.

reojoe
reojoe

Big gubment pays A LOT of fees to people who don't pay taxes here.

GloriaJL
GloriaJL

Yeah--how much money do you think Halliburton and Dick Cheney skimmed off us???

azne69
azne69

Are we possibly still on the edge of another recession? Looks like it, how's that hope & change working for you..

reojoe
reojoe

Bad news for GM and America is good news for republicans. (See azne's post as perfect proof).

Dave88
Dave88

There are reasons company's continue to move jobs off shore. We may not agree or like it but the more costly it is to do business here the more this will happen.

GloriaJL
GloriaJL

Seriously??? How much money do the GMAC people earn??? The company who won the bid is headquartered offshore--I assume to avoid taxes. I don't exactly understand the relationship between Fannie and Freddie and their loan servicing company, but somehow it seems the government could say that they are not paying any business to service US mortgages that offshores the jobs.

1darkstar
1darkstar

GM is not a part of GMAC for years now.

part of something greater
part of something greater

Got to keep these jobs in Waterloo. Look up Ally on Wikipedia and see who owns it. Feds.

JD Kinnick
JD Kinnick

More "hope and change?"

reojoe
reojoe

Nope, just more bad news, precisely what you are seeking.

AndyDandy
AndyDandy

In order to preform a more perfect union,we should nationalize this business, save these job locally , and let government run this business. We can afford it and can print our own currency. Let's ignore our standard of living compared to other countries, corporate tax rates, local tax rates, cost of energy, insurance costs. Let's pretent like we can compete with some other countries and everything will OK.

xdfred2
xdfred2

Sure. That was a big hit in the soviet union.

GloriaJL
GloriaJL

What amazes me is there aren't 1,000 comments on this website. Come on employees, get up and fight for your jobs. Call your congressmen, the White House, and anywhere you can leave a message. Our ancestors had to fight for everything they got. AND BTW, I don't work there, don't know anyone who works there, don't have a mortgage there. I am smart enough to know what this will do to the real estate market and unemployment rate. We need these decent paying jobs HERE!!!!

Nemo7
Nemo7

You know why they aren't commenting? Because Ocwen has already guarunteed them that their jobs aren't in danger. Yet another Courier fail. Do they ever get anything right?

reojoe
reojoe

I repeat: bad news for America and American bidnesses is good news for republicans.

I couldn't dream of EVER hating my own country THAT profoundly.

YIKES!!!!!!!!!!!!!!!!!!!!!!!!!!!

Dave88
Dave88

No I couldn't imagine hating America as much as you do either.

Chester11
Chester11

Azne, you have absolutely no idea what you're talking about. This is a private investment firm (you know, the private companies idolized and lionized by the GOP) and they are making their own decisions. The government, as Republicans want it, can't do anything to stop what this firm does.
Oddly though, if you had the anti-laziness to look into this a little more you'd see that Conservative villains Freddie Mac and Fannie Mae are about the only thing standing in the way of these jobs going offshore. They have traditionally tried, more than several private enterprises, to keep jobs with their name attached as the backing agent stateside.
You sound like Sarah Palin and that's NOT a compliment.

HisTruth1129
HisTruth1129

It is really something to see people commenting on a subject they know nothing about,! I do work there, I'm the sole provider for my household, and I have children. So for someone to speculate why we are not commenting or that we've been guaranteed anything is ignorant. Have you stopped to think that maybe we are just trying to make sense out of this just like everyone else, thinking about how we will take care of our families if we don't have a job? No, you just want something else to talk about. My suggestion would be to be a little more sympathetic.

IndianaFreeBird
IndianaFreeBird

Why does it matter if only 1,000 lose their job? It's not like it's going to affect anyone in this area. This is just another political failure by Romney. Romney starts importing all of these jobs, and this is what happens. Maybe if we would start focusing on the tumbling economy in China, our jobs could start being saved.
The only people who ever lose their jobs are the ones that deserve it. I'm guessing at least 900 of these people are looking forward to collecting unemployment, and using that money to invest in movie theatres. With the combination of our movie theatres getting exported, and incompetent workers investing in corn meal, it's no wonder Obama will get another 4 years, and Romney only 2.

GloriaJL
GloriaJL

?????????????????????

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