One of the biggest casualties of the 2008 housing collapse is re-entering the mortgage business just two years after it stopped making new home loans
Ally Financial Inc., whose defunct GMAC Mortgage unit was one of the biggest lenders of subprime mortgages until the 2008 crash, will inch back into direct home loan originations next year, the bank’s CEO Jeffrey Brown said at a recent Goldman Sachs Group Inc. financial conference in New York.
“Don’t think of this as Ally going down the road of the old GMAC,” said Brown, referring to the home lending unit that brought Ally to the brink of collapse.
The bank has no plans to securitize its originations, and it won’t keep any servicing rights or build out a servicing operation, Ally spokeswoman Gina Proia said in an e-mail to Bloomberg News. The bank will detail new product offerings, including a new credit card, at its investor conference in February.
At the height of the housing boom in 2006, GMAC’s Residential Capital, ranked 12th among U.S. subprime lenders, according to trade publication Inside Mortgage Finance. When Ally exited home lending in 2013, former CEO Michael Carpenter said mortgages were in its “rear-view mirror.”
That ended an almost 30-year foray that led to more than $10 billion in losses and a $17.2 billion U.S. bailout.
Its decision to return to the market also comes as the mortgage industry looks for ways to revive various forms of home lending – including subprime – that all but disappeared in the immediate aftermath of the housing crisis.
“Don’t think of this as Ally going down the road of the old GMAC,” said Brown, referring to the home lending unit that brought Ally to the brink of collapse.
The bank has no plans to securitize its originations, and it won’t keep any servicing rights or build out a servicing operation, Ally spokeswoman Gina Proia said in an e-mail to Bloomberg News. The bank will detail new product offerings, including a new credit card, at its investor conference in February.
At the height of the housing boom in 2006, GMAC’s Residential Capital, ranked 12th among U.S. subprime lenders, according to trade publication Inside Mortgage Finance. When Ally exited home lending in 2013, former CEO Michael Carpenter said mortgages were in its “rear-view mirror.”
That ended an almost 30-year foray that led to more than $10 billion in losses and a $17.2 billion U.S. bailout.
Its decision to return to the market also comes as the mortgage industry looks for ways to revive various forms of home lending – including subprime – that all but disappeared in the immediate aftermath of the housing crisis.
