One of the financial institutions that are party to the reported settlement agreement with the attorneys general of the majority of the states is reportedly on the auction block. According to Bloomberg News, Ally Financial is talking with private equity firms about selling its mortgage unit, Residential Capital LCC, through a pre-package bankruptcy.
Any sale of the company would be complicated by its recent financial history. The company was founded as General Motors Acceptance Corporation (GMAC) in 1919 by General Motors as an intermediary to provide financing for the purchase of its autos. Over the years it expanded into other types of lending and into real estate brokerage and adopted the acronym as its brand name.