GMAC posts auto finance profit, but still loses $767M

[Buick61]

GMAC posts auto finance profit, but still loses $767M
Automotive News

NEW YORK (Reuters) -- GMAC Financial Services, a lender that has received $12.5 billion in government bailouts, today said it posted a third straight quarterly loss, hurt by red ink in its mortgage business.

The third-quarter net loss for Detroit-based GMAC was $767 million, compared with a loss of $2.5 billion a year earlier.

GMAC's auto finance unit had a profit of $395 million in the quarter, while its mortgage operations posted a loss of $747 million.

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 Co. and the private equity firm Cerberus Capital Management LP.

GMAC said that during the quarter some businesses -- including its U.S. 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 $671 million, it said.

"We continue to work through solutions for certain legacy assets, and that is still weighing on GMAC's financial performance," CEO Alvaro de Molina said in a statement.

GMAC, the traditional lender to GM dealers and customers, converted to a bank holding company in December to become eligible for bailout money the U.S. Treasury was pumping into banks.

The company, which is taking over the auto loan business of Chrysler, has been reported in talks with the Treasury for a third cash infusion as it approaches a deadline to implement a plan to enhance its capital.

[doh]

Again I ask "Why are they into anything other than Auto Financing?"

But one may wonder how much of the lose is because of Dealerships that have had the plug pulled?

Unpaid Floorplans, Unpiad mortgages, Unpaid vehicles after the dealer has delivered them to the customer, the Auditors cannot be there 24/7.

[emg77]

Originally Posted by doh

Again I ask "Why are they into anything other than Auto Financing?"

But one may wonder how much of the lose is because of Dealerships that have had the plug pulled?

Unpaid Floorplans, Unpiad mortgages, Unpaid vehicles after the dealer has delivered them to the customer, the Auditors cannot be there 24/7.

They are in home mortgages because it was very profitable until the housing meltdown. Just my opinion, but the Government had more to do with the meltdown in housing than anyone.

I think GM sold off a good portion of GMAC mortgage a couple years back to raise some cash. I didn't think it was a good idea at the time, but maybe they saw this coming.

GMAC might have been impacted harder by the mortage meltdown because they typically didn't sell their mortgages to other banks.

GMAC operates Ditech and Ally Bank too.

I have my mortgage through GMAC, and I have been very pleased with them.

[Member17739]

Originally Posted by doh

Again I ask "Why are they into anything other than Auto Financing?"

But one may wonder how much of the lose is because of Dealerships that have had the plug pulled?

Unpaid Floorplans, Unpiad mortgages, Unpaid vehicles after the dealer has delivered them to the customer, the Auditors cannot be there 24/7.

Which bank is dealing with auto loans only?

[WishIhadatruck]

I had my mortgage through GMAC on my last house for a few years, they were great to deal with and had a great website even back then when many didn't for managing your account and doing electronic payments. They made a ton of money on mortgages over the years but it all blew up recently along with the rest of the industry. It did turn out to be a good thing they sold 1/2 of it off when they did. Too bad they didn't sell it all off or at least all the mortgage business.

[stormwatcher]

Originally Posted by emg77

They are in home mortgages because it was very profitable until the housing meltdown. Just my opinion, but the Government had more to do with the meltdown in housing than anyone.

GMAC was profitable for over half a century until Cerberus got their hands on it. Their pursuit of the junk mortgage market is what did them in.

[XP300]

My step-son has a GMAC mortgage. His house is worth 60 percent of it's former value. He tried for a mortgage modification, but GMAC is stringing him along. If they would modify his mortgage, he would be paying something back, but since they are being a bunch of jerks, he stopped paying the mortgage and GMAC won't get anything!

[smithb]

Originally Posted by XP300

My step-son has a GMAC mortgage. His house is worth 60 percent of it's former value. He tried for a mortgage modification, but GMAC is stringing him along. If they would modify his mortgage, he would be paying something back, but since they are being a bunch of jerks, he stopped paying the mortgage and GMAC won't get anything!

Wow, this is why our economy crashed. This is why my kids, grandkids, and greatgrandkids will be paying for our debt. Irresponsible people not paying their debts. Now I have to pay for it with my tax money. I'm sorry GMAC treated him like a "jerk" because he cannot pay the debts he agreed to. There are many ways to avoid a situation where you can't pay your debts, none of them are pleasant. Just because you like big houses and someone will loan you the money to buy it, doesn't mean you should. I can see who the jerks are.

[ejawodo]

Originally Posted by XP300

My step-son has a GMAC mortgage. His house is worth 60 percent of it's former value. He tried for a mortgage modification, but GMAC is stringing him along. If they would modify his mortgage, he would be paying something back, but since they are being a bunch of jerks, he stopped paying the mortgage and GMAC won't get anything!

Except his house.

[chevyman1973]

Why do so many people i meet still think gm ownes gmac!

[smithb]

Originally Posted by chevyman1973

Why do so many people i meet still think gm ownes gmac!

I don't know, but the other night on the news they had a story about GMAC asking for more money and the video they showed during the entire story was of GM car dealers and their GM cars. Even if they were trying to infer the car financing aspect, which didn't include Chrysler, the producer is still incompetent since the problem is with Ditech and not with the vehicle loans. No stories on Toyota killing its owners through poor design and the largest auto recall in history though.

[iluvcamaros]

Originally Posted by ejawodo

Except his house.

I know. It is like not paying your mortgage is a good thing. Like the bank cares? They will take the house and his credit will be ruined. Hope he likes renting.

[eaton53]

Originally Posted by iluvcamaros

I know. It is like not paying your mortgage is a good thing. Like the bank cares? They will take the house and his credit will be ruined. Hope he likes renting.

I'm a landlord and would not rent to someone who got foreclosed.
Didn't pay once, might not pay again. And yes... I do credit checks.

Hope he likes the slum... I'm sure a less picky landlord would take him.

[Vintalage]

Originally Posted by iluvcamaros

I know. It is like not paying your mortgage is a good thing. Like the bank cares? They will take the house and his credit will be ruined. Hope he likes renting.

The bank would care if it wasn't rewarded for failure. We fail and lose everything. The banks fail and they get bailed out because they're too big to fail.

[Dana_15]

Originally Posted by smithb

Wow, this is why our economy crashed. This is why my kids, grandkids, and greatgrandkids will be paying for our debt. Irresponsible people not paying their debts. Now I have to pay for it with my tax money. I'm sorry GMAC treated him like a "jerk" because he cannot pay the debts he agreed to. There are many ways to avoid a situation where you can't pay your debts, none of them are pleasant. Just because you like big houses and someone will loan you the money to buy it, doesn't mean you should. I can see who the jerks are.

Well said.