ResCap To Cease Funding $1.7B In Home Equity Credit Lines

Law360, New York (May 15, 2012, 7:39 PM EDT) -- Residential Capital LLC, the troubled mortgage unit of Ally Financial Inc. that entered into a prepackaged bankruptcy Monday, won permission from a bankruptcy judge Tuesday to inform customers it will stop funding $1.7 billion in consumer home equity lines of credit.

In connection with its Chapter 11 filing, ResCap asked the court to allow it to notify borrowers whose home equity credit lines are part of certain pools that their funding would be suspended so that the company could conserve cash.

U.S. Bankruptcy Judge James Peck...
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