Inside the complex, you run into people like Tracy Zobel, who radiates a Midwestern work ethic and an aw-shucks charm.
Zobel, 44, a mother of four married to a dairy farmer, has spent 18 years working her way up from part-time call center rep to vice president in charge of loss mitigation. She loves ResCap, loves her job and loves the fact that she’s the source of health insurance for her family.
“Our culture is one of my most favorite aspects — the friendships and just the way we work together,” she says. “We work very hard, and we enjoy what we do and each other. It’s just a unique culture where you’re doing the right thing for the right reasons.”
If this all sounds almost too bucolic and wholesome to be true — well, it may not be true much longer. Waterloo’s future could be determined by an auction being held 1,059 miles away, at the Sheraton New York Hotel in midtown Manhattan, on Tuesday.
At the auction, ResCap, a former high-flying General Motors subsidiary that tumbled into bankruptcy in May, will find out how much bidders are willing to pay for the rights to service the $365 billion in mortgages that it handles. (We’ll explain “servicing” in a bit.)
The auction’s outcome will likely determine whether most of ResCap servicing employees will keep their jobs — and whether the mortgage borrowers that they work with will deal primarily with American loan servicers, as they do now, or with servicers in the Indian cities of Bangalore and Mumbai.
This auction reflects two of the biggest issues in the current political debate and presidential campaign: good U.S. jobs and corporate America practicing extreme tax avoidance at a time of huge revenue shortfalls for the federal government. Whatever happens at ResCap may also become a template for the mortgage-servicing industry, which employs tens of thousands of U.S. workers, many of whose jobs are vulnerable to being outsourced unless Fannie Mae and Freddie Mac — the “government-sponsored enterprises” that are the biggest players in the mortgage business — adopt regulations forbidding or limiting it.
But none of the social questions — outsourcing of jobs, treatment of troubled customers, moving profits (legally) into tax havens — will play a role in Tuesday’s auction. It’s all about bankruptcy law, which is concerned with creditors’ rights and debtors’ obligations, not with social issues. Wall Street concerns — ResCap’s debt is owned primarily by professional investors — trump the Main Street concerns of employees, vendors and borrowers. “What we call the ‘highest and best’ bid is what prevails in bankruptcy court,” says Stephen Lubben, a bankruptcy expert who teaches at Seton Hall University, “and ‘highest and best’ means what’s best financially for creditors, not for any other party.”