Ally Bank completes sale of mortgage portfolio

MIDVALE, Utah (AP) -- Ally Bank has wrapped up the previously announced sale of its mortgage-servicing portfolio to Ocwen Financial Corp. and Quicken Loans Inc.

The banking unit of Ally Financial Inc., the former financing arm of General Motors, said Wednesday that it received roughly $850 million for the sale of mortgage-servicing rights. The business involves collecting payments from borrowers of home loans. Ally said the mortgage portfolio consisted of $115 billion in unpaid principal.

Ally said in October that it was considering selling off the bulk of its remaining mortgage business, along with a business lending operation. The deals with Quicken Loans and Ocwen Financial were announced last month.

Ally has ramped up its direct banking business, offering consumers low-cost, online-only accounts. In a statement, Barbara Yastine, Ally Bank's CEO, said that the sale puts Ally in a position to focus on expanding that business, as well as its car loan franchise.

Ally, which used to be known as GMAC, was among the nation's largest mortgage lenders before the housing market collapse. The government rescued the company during the financial crisis and still owns roughly 74 percent of the company, according to Ally's regulatory filings.