GMAC Sells Home Services Unit
(update 1: clarifies that the purchase involves a unit of Residential Capital LLC, which is itself a subsidiary of GMAC Financial Services; an earlier story had incorrectly specified the business sold as tied directly to GMAC Financial Services) Troubled GMAC LLC moved to unload a part of its real estate business on Tuesday, in a clear effort to raise cash. A unit of Brookfield Asset Management Inc. (BAM) said Tuesday that it had entered into an agreement to purchase GMAC Home Services LLC, part of Residential Capital LLC, a deal that will give the Canadian real estate firm a U.S. foothold in relocation, real estate franchising and brokerage operations, as well as home financing. The businesses to be acquired by Brookfield include: GMAC Global Relocation Services, GMAC Real Estate and GMAC Home Services Mortgage. Terms of the deal were not disclosed. "Notwithstanding the recent market turmoil, this acquisition represents an important opportunity for us to expand in the U.S. market for residential property services," said Brookfield chairman George Myhal, "and we believe we are well-positioned to grow our market share once this difficult period of adjustment is behind us." In Canada, Brookfield provides executive relocation services, home appraisals and property brokerage services under the Royal LePage, La Capitale, Johnston & Daniel and Centract brand names. "The purchase of GMAC Home Services by Brookfield allows us to join a globally recognized and respected real estate and relocation services organization," said John Bearden, president and CEO, GMAC Home Services. Neither company mentioned if GMAC Home Services would look to change its name once the acquisition is completed, expected sometime before the end of the fourth quarter of this year. GMAC has been reeling this year from spiraling exposure to residential mortgages at its Residential Capital, LLC arm. Earlier this month, the company laid off 5,000 ResCap employees, and said it would exit retail mortgage lending completely, shutting down 200 offices nationwide. The company had said previously it was shopping for a buyer for its home services unit. Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.