NEW YORK – NCUA has joined a variety of creditors in the huge Residential Capital LLC bankruptcy seeking a mediator to review its claims of $300 million in recompense for the failures of U.S. Central FCU and WesCorp, among the credit union agency’s growing claims over the collapse of the corporate system.

Meantime, a federal bankruptcy judge has agreed to extend the period in which the receiver for ResCap, the former mortgage arm of GMAC, has to file its own Chapter 11 reorganization plan until April 29, during which the debtor may seek approval from NCUA and other creditors on a payment plan.

NCUA, as liquidating agent for U.S. Central and WesCorp, holds about $300 million in fraud and other claims that ResCap violated its own standards in packaging subprime mortgages into mortgage-backed securities that eventually were purchased by the two corporate giants. The claims are similar to ones NCUA has waged against nine different investment banks that sold MBS to one or more of the five corporate failures.

Other ResCap creditors also are seeking a mediator to sort out the complicated claims in the case, including AIG Asset Management and Allstate Insurance, Massachusetts Mutual life, and various Prudential entities.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the credit union industry

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.