Berkshire Hathaway has offered to purchase the loan portfolio and mortgage division of Residential Capital LLC, known as ResCap, which filed for bankruptcy last month, according to Bloomberg BusinessWeek. A subsidiary of Ally Financial Inc., which make loans to auto buyers and finances auto inventories, and which itself is owned 74 percent by the U.S. government as the result of the auto industry bailout, Rescap was highly leveraged due to mortgage defaults. Berkshire has matched another suitor’s bid of $2.4 billion for the mortgage unit, and slightly outbid Ally for the loan portfolio, $1.45 billion to Ally’s $1.4 billion. As in other instances of not engaging in bidding wars, Berkshire will wait until June 19 for the court to approve its offer. Ally may actually pay $1.6 billion under the Chapter 11 bankruptcy re-organization plan for Rescap, which was called GMAC Inc. before the auto industry bailout of 2008. Berkshire Hathaway is familiar to MHProNews.com as the owner of manufactured housing producer Clayton Homes, which operates its own lending unit.
