An auction of Ally Financial's Residential Capital has advanced into the second round, with some would-be buyers circling the assets, but a sale of the mortgage lender faces hurdles, sources familiar with the matter said.
The list of potential bidders includes private equity firm Centerbridge Partners, insurer MetLife Inc and specialty asset management firm Private National Mortgage Acceptance Co (PennyMac), which is backed by money manager BlackRock Inc , the sources said.
But there is no guarantee that any of these firms will actually put in bids.
Private equity firm Blackstone Group , which in March was said to be looking at ResCap, is no longer seriously pursuing the mortgage lender, said another source familiar with the matter.
The auction includes bidders who want only parts of ResCap -- legacy loan assets, mortgage servicing and origination -- although the sellers would prefer to sell ResCap in its entirety, one of the sources said.
Ally, formerly known as GMAC Inc, hopes to close on a deal by the end of the year, the sources said. The company is majority-owned by the U.S. government.
Ally Financial continues to explore strategic alternatives for its mortgage operation with the goal of reducing risk and preserving value, it said in a statement. We are evaluating all options thoughtfully, while defining a viable long term strategy. There is nothing more to announce at this time.
MetLife, Blackstone, BlackRock and PennyMac declined to comment. Centerbridge was not immediately available for comment. The sources are anonymous because the sale process is private.
A sale of ResCap is an important part of Ally's turnaround, one of the largest U.S. car loan companies. Home loans fueled the lender's growth earlier this decade, but then triggered billions of dollars of losses amid the financial crisis.
The U.S. government injected more than $17 billion into Ally, and holds a 56.3 percent stake as a result. Private equity firm Cerberus Capital Management LP owns 14.9 percent of GMAC, while General Motors owns 6.7 percent.
Ally has hired Goldman Sachs and Citigroup Inc to advise on a range of issues, including strategic alternatives for the mortgage business and repayment of taxpayer funds.
In April, ResCap agreed to sell European mortgage assets and businesses to affiliates of hedge fund and private equity firm Fortress Investment Group .
(Reporting by Paritosh Bansal and Megan Davies, editing by Andre Grenon and Matthew Lewis)