Buffett's Berkshire seeking to buy ResCap mortgage unit

Updated: June 11, 2012 - 8:11 PM

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Berkshire Hathaway Inc., the holding company run by billionaire Warren Buffett, offered to buy Residential Capital's mortgage unit.

Berkshire seeks to replace Fortress Investment Group as the initial bidder at an auction for the bankrupt company's most-valuable asset.

Berkshire is also willing to become the so-called stalking- horse, or initial, bidder for the part of ResCap's loan portfolio that Ally Financial Inc. wants to buy. Berkshire said in court papers filed Monday in U.S. Bankruptcy Court in Manhattan that it will offer better terms than Fortress and Ally.

On June 18, U.S. Bankruptcy Court Judge Martin Glenn is scheduled to consider approving auctions for the assets and naming Fortress' Nationstar Mortgage Holdings Inc. and Ally as the initial bidders.

ResCap filed for bankruptcy May 14 with plans to sell most of its assets to Fortress. Ally, a Detroit-based bank that specializes in car loans, owns ResCap.

Ally supported the bankruptcy filing as a way to resolve legal claims related to mortgage-backed securities. Ally is 74 percent-owned by the U.S. Treasury after receiving a bailout.

Gina Proia, a spokeswoman for Ally, Gordon Runte, a spokesman for Fortress, and Susan Fitzpatrick, a spokeswoman for ResCap, declined to comment on Berkshire's offer.

Fortress has offered to pay $2.4 billion for ResCap's mortgage unit, which makes home loans and services them.

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