US May Object To Proposed $130M ResCap Loan Auction

Law360, New York (January 11, 2013, 2:24 PM EST) -- U.S. Attorney Preet Bharara told a New York bankruptcy court Thursday that the government may object to a proposal by bankrupt Residential Capital LLC to auction off $130 million worth of loans insured by the Federal Housing Administration, saying such a sale may extinguish its debt setoff rights tied to the loans.

The government held short of objecting to the proposed auction but said it was reviewing the proposed sale to see if the auction stifles its practice of withholding FHA insurance payments on the government-guaranteed...
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