Residential Capital (ResCap), the bankrupt mortgage unit of Ally Financial, should be barred from selling its loan servicing unit until the company provides more information about the deal, investors who bought ResCap mortgages said in court papers.

Fannie Mae and Freddie Mac, the two government-chartered mortgage buyers, on Monday objected to the sale, claiming that without changes the proposed deal may threaten contracts they have with ResCap to service loans.

The unit being sold collects payments and provides foreclosure services on more than 1 million loans Fannie and Freddie bought from ResCap. Because they own a large share of the 2.4 million loans that ResCap services, the two mortgage holders said in court papers filed in Manhattan, they expected ResCap to be more cooperative.

ResCap, based in New York, filed for bankruptcy in May with plans to sell most of its assets and resolve legal claims related to residential mortgage-backed securities.

The company said last month that it is working to resolve objections to the proposed sale.

ResCap plans to hold an auction for the mortgage servicing business, with a unit of Fortress Investment Group LLC as the lead bidder. The unit, Nationstar Mortgage Holdings Inc., has agreed to buy the servicing business for more than $2.4 billion unless it is outbid.

In separate filings, Fannie Mae and Freddie Mac said they would support the sale if ResCap and the winning bidder provide enough information to ensure that their servicing contracts are not disrupted.

The case is In re Residential Capital LLC, 12-12020, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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