Residential Capital to offer Fannie Mae USD 297.6m to block objection

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This article was originally published on Financial Times Debtwire. 

Residential Capital agrees to pay USD 297.6m in exchange for the drop of objection by Fannie Mae of a sale of ResCap’s mortgage servicing unit to Ocwen Financial Corp., according to a document filed under the US Bankruptcy Court Southern District of New York.

The payment will include USD 265m as the so-called cure payments and USD 32.6m for the outstanding amount of a debt between the two parties, according to the document. Such payment will be considered as “fully and finally” satisfying Fannie Mae’s earlier objection to the potential sale citing uncertain outcomes and performances, said lawyers Todd Goren for ResCap and David Neier for Fannie Mae in the filing.

The sale is scheduled to be complete by 1 February, and other investors who also purchased mortgages by the Minneapolis, Minnesota based mortgage firm are still in talks on the amounts of their cure payments. The sale to Ocwen would still be pending before other potential objections are cleared

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