Business

Buffett, IBM vie for ResCap

Big Blue appears as though it will be giving Warren Buffett a run for his money in the $2.4 billion auction of the mortgage-servicing portfolio of bankrupt ResCap, The Post has learned.

And that might be fine with the Oracle of Omaha.

IBM, which is in the mortgage-servicing sector through its ownership of Seterus, has teamed with the Ocwen Financial Group to consider bidding for the ResCap portfolio at an Oct. 23 bankruptcy auction, a source close to the process said.

That would appear to put IBM in direct competition with Buffett’s Berkshire Hathaway, which is teaming with a small mortgage-servicing provider for a possible bid, sources said.

Fortress Investment Group has submitted the stalking horse, or initial, bid and remains in the hunt, sources said.

Ally Bank still owes taxpayers $11.5 billion of the $17.2 billion handed over as a bailout.

Losses at its mortgage arm have dragged down Ally, and proceeds from the sales will go to ResCap creditors.

Still, mortgage servicing is becoming more profitable and for the right price there are a handful of firms that are looking to replace the banks in the business of collecting mortgages and paying investors.

Wells Fargo is the only bank that still seems committed to the business, sources said.

IBM’s Seterus developed a bad reputation among homeowners. The Better Business Bureau in February gave it an F rating because of the volume and severity of complaints issued with them. Since then, the bureau has raised its rating on Seterus to B-.

The US is forcing Buffett, who does not own a mortgage-servicing business, to partner with a servicer to become a qualified bidder, a source said.

The small size of the servicer Buffett teamed with has convinced some that the billionaire investor is not serious about winning the assets, sources said.

Buffett’s interest in ResCap’s servicing assets may be simply to get Fortress to increase its offer so Berkshire could collect more on its ResCap debt position.

“I personally think he’s not in it to win the mortgage assets,” a source close to the process said.

Berkshire Hathaway, IBM and Ocwen TK did not return calls for comment. Treasury had no comment.