Ally Financial has filed a registration statement with the Securities and Exchange Commission for an initial public offering to sell common stock held by the U.S. Department of the Treasury.

Ally will not receive any of the proceeds of the offering, and it revealed that its Residential Capital (ResCap) unit may have difficulty continuing as a going concern.

Ally received $16 billion of Troubled Asset Relief Program (TARP) funding from the government. The Treasury has a nearly 74% stake in Ally, which was formerly part of GM. After the federal government, Ally's largest shareholder is hedge fund giant Cerberus Capital Corp., which controls 9%.

The number of shares to be offered, the price range and timing for the IPO have not yet been determined.

In 2010, Ally originated $70 billion including $62 billion through the correspondent channel, the filing said. According to MortgageStats.com, its ResCap subsidiary ranked 5th nationwide among lenders with $23.23 billion of production and a 4.27% market share in the fourth quarter of last year.

At Dec. 31, 2010, it serviced 2.4 million mortgage loans with $361 billion of unpaid principal balances, the registration statement noted.

The filing states "We have substantially derisked our mortgage operations since the onset of the housing crisis and reduced our overall mortgage assets from $135.1 billion in 2006 to $36.8 billion at the end of 2010, primarily through the run-off and divestiture of noncore businesses and assets."

There is also a statement in the S-1 filing that declares, "In light of ResCap’s liquidity and capital needs combined with volatile conditions in the marketplace, there is substantial doubt about ResCap’s ability to continue as a going concern.

"If Ally determines to no longer support ResCap’s capital or liquidity needs or if ResCap or Ally are unable to successfully execute effective initiatives, it could have a material adverse effect on ResCap’s business, results of operations, and financial position." Citigroup Global Markets, Goldman Sachs, JPMorgan Securities, and Morgan Stanley will serve as joint global coordinators and joint book-running managers of the offering.

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