GMAC posts third-quarter loss on its mortgage loans after housing crash
GMAC Financial Services, a US lender that has received $12.5bn ($7.54bn) in government assistance, posted a third straight quarterly loss yesterday as its mortgage business continues to reel from the housing market collapse.
The third-quarter net loss for Detroit-based GMAC was $767m, compared with a loss of $2.5bn a year earlier.
GMAC’s auto finance unit had a profit of $395m in the quarter, while its mortgage operations posted a loss of $747m.
The lender has struggled as the deteriorating auto and housing markets have caused financing volume to decline and credit losses to increase.
GMAC’s owners include automaker General Motors and the US private equity firm Cerberus Capital Management .
GMAC said that during the quarter some businesses — including its US consumer property and casualty insurance business and some financing business in Argentina, the UK and Italy — were classified as discontinued operations.
Excluding those businesses, its loss from continuing operations was $671m, it said.
The earnings report comes a week after the Treasury Department said it was in talks with the New York-based lender to give it a third round of taxpayer aid. However, a Treasury spokeswoman declined to provide updates on the talks yesterday.