OMAHA -- Warren Buffett's Berkshire Hathaway Inc. is offering to buy the mortgage division and loan portfolio of Residential Capital LLC, which filed for bankruptcy protection in May.
Berkshire seeks to replace Fortress Investment Group LLC as the initial bidder at an auction for the bankrupt company's most valuable asset.
Fortress has offered to pay $2.4 billion for ResCap's mortgage unit, which makes home loans and services them. Berkshire said it would pay the same amount as Fortress while cutting the cost of any breakup fee.
Should Fortress lose the auction, it would be entitled to a $72 million breakup fee and $10 million in expense reimbursement, according to court records. Berkshire says it will accept $24 million as a breakup fee and not seek any reimbursement for its expenses.