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March 6, 2021
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UBPRIME LENDING-FALLOUT
(2007-03-14)
(wgvu) - HEAVY QUARTERLY LOSSES AT GENERAL MOTORS ACCEPTANCE CORPORATION'S (GMAC)HOME-LENDING UNIT ARE UNDERSCORING PRESSURES ON THE BUSINESS AND MORTGAGE
INDUSTRY.
GMAC'S RESIDENTIAL CAPITAL -- KNOWN AS RESCAP -- REPORTED A FOURTH-QUARTER OPERATING LOSS OF $651 MILLION DOLLARS. IT EARNED $118 MILLION DOLLARS IN THE SAME PERIOD A YEAR AGO.
THE COMPANY SAYS THE LOSS REFLECTS INCREASED RESERVES RELATED TO
DELINQUENCIES ON SUBPRIME LOANS, A SLOWDOWN IN NEW HOME
CONSTRUCTION AND OTHER FACTORS.
GMAC FINANCIAL SERVICES EXPECTS RESULTS WILL CONTINUE TO BE
HURT BY THE MORTGAGE MARKET.
GENERAL MOTORS SOLD A MAJORITY STAKE IN GMACTO A CONSORTIUM
OF INVESTORS LAST SPRING.

(COPYRIGHT 2007 BY THE ASSOCIATED PRESS. ALL RIGHTS RESERVED.)


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