(Reuters) - Auto lender Ally Financial Inc’s banking unit said it would sell its remaining mortgage servicing rights portfolio to online lender Quicken Loans Inc for about $280 million.
Ally, which is 74 percent-owned by the U.S. government after a series of bailouts, has been exiting the mortgage business as part of a plan to focus on auto lending and Internet banking.
Detroit-based Quicken is buying collection rights on $34 billion of non-delinquent Freddie Mac FMCC.OB and Fannie Mae FNMA.OB mortgages. Quicken, which has a $90 billion mortgage servicing portfolio, said it would become a top-10 servicer after the purchase.
The transaction is expected to close in the second quarter and is subject to approvals from Fannie Mae and Freddie Mac.
Ally, also based in Detroit, will have no further MSR assets once it closes the transactions with Ocwen and Quicken.
Ally received $17.2 billion in bailouts during the financial crisis after losses ballooned in its subprime mortgage portfolio. It says it has paid back $5.9 billion, including dividends.
The lender’s Residential Capital mortgage unit filed for bankruptcy in May 2012, and Ally has been selling international operations in a bid to speed up repayment to taxpayers.
The U.S. Federal Reserve this month singled out Ally as the weakest of 18 banks in an annual stress test meant to show how they would fare in a severe economic downturn.
Reporting by Tanya Agrawal in Bangalore and Rick Rothacker in Charlotte. N.C.; Editing by Saumyadeb Chakrabarty and Nick Zieminski