Countdown begins for auction of ResCap’s MSRs

Two firms waiting in the wings to acquire Residential Capital’s mortgage servicing rights out of bankruptcy are nearing the final bid deadline of 5 p.m. on Friday afternoon.

It’s well known that Nationstar Mortgage Holdings (NSM) agreed to become the stalking-horse bidder for ResCap’s mortgage servicing rights after Ally Financial placed its ResCap mortgage unit in bankruptcy. But the firm is facing competition from Warren Buffett’s Berkshire Hathaway (BRK), which tried to outbid Nationstar in June. 

Bids will no longer be accepted after Friday’s deadline.

Analysts with Compass Point Research & Trading said debtors and a credit committee will work through the weekend to determine the starting bid, which will be used to launch the court-led bidding process when the auction opens at 10 a.m. on Oct. 23.

The minimum bid for the MSR platform is $5 million, Compass Point Research & Trading said. That minimum cannot be changed without the approval of the creditor’s committee and Nationstar.

Nationstar, a mortgage servicing firm out of Texas, initially offered to purchase $201 billion in servicing unpaid principal for $700 million, and $173 billion in subservicing UPB for $180 million.

After the Berkshire Hathaway bid surfaced, Nationstar upped its bid price by $125 million. 

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