Ally mortgage biz creates battles even in bankruptcy

Residential Capital, the mortgage lending subsidiary of Ally Financial, may have recently unloaded a series of mortgage assets while in bankruptcy reorganization, but creditors owed money by Ally Financial say they deserve to be repaid before other parties, Bloomberg News reports.

In fact, the report says a group of creditors want to be paid before any money goes to the U.S. government for funding a $17 billion bailout of Ally Financial.

Apparently, the creditors see that Ally will collect $9 billion from sales of its operations and feel they should be one of the first in line to be compensated, according to Bloomberg.

Walter Investment Management (WAC) and Ocwen Financial (OCN) recently grew their size in the mortgage servicing space by acquiring mortgage servicing rights from ResCap out of bankruptcy.

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