Traverse City Record-Eagle

Business

March 22, 2013

Business in Brief: 03/22/2013

Quicken buys rights to mortgages

DETROIT — Quicken Loans Inc. says it has bought the servicing rights to about $34 billion in mortgages from Ally Financial Inc.

Detroit-based Quicken said Thursday that the loans are non-delinquent Freddie Mac and Fannie Mae-backed mortgages that currently have higher-than-market interest rates that “could substantially benefit from refinancing.”

Quicken says the deal is expected to close in the second quarter following approvals from Fannie Mae and Freddie Mac.

The company says the deal “will dramatically increase” Quicken’s mortgage servicing business, which had $90 billion in mortgages before the deal.

Detroit-based Ally Financial says the value of the mortgage servicing portfolio was about $280 million in January. Ally is a spinoff from General Motor’s former lending arm, GMAC.

Cyprus rushes bailout plan as clock ticks

NICOSIA, Cyprus — Cypriot politicians moved Thursday to restructure the country’s most troubled bank as part of a broader bailout plan that must be in place by Monday to avoid financial ruin. Concerned customers rushed to get cash from ATMs as bank employees protested.

Cyprus has been told it must raise 5.8 billion euros ($7.5 billion) if it is to receive 10 billion euros ($12.9 billion) from its fellow eurozone countries and the International Monetary Fund. If it does not find a way by Monday, the European Central Bank said it will cut off emergency support to the banks, letting them collapse.

That would throw the country into financial chaos and, ultimately, cause it to leave the eurozone, with unpredictable consequences for the region.

Several new bills were being submitted to Parliament Thursday night, including restructuring the banking sector, setting up an “Investment Solidarity Fund” and restricting banking transactions in times of crisis.

Together, they will make up at least part of the alternative plan Cyprus hopes will secure it bailout money. The lawmakers said the bills would be discussed and potentially voted on Friday morning.

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