Financing unit posts another loss
GMAC, the ailing financing arm of General Motors Corp., posted its fifth straight loss and said its mortgage unit might not survive.
The third-quarter net loss widened to a record $2.52 billion from $1.6 billion a year earlier, the Detroit company said. Revenue declined 43% to $1.72 billion.
The Residential Capital home-loan unit lost $1.9 billion during the quarter, and GMAC’s auto finance business lost $294 million.
GMAC was crushed by slumps in the housing market, where foreclosures are running at record levels, and in auto sales, which GM labeled the worst since 1945 when it reported October results this week. ResCap, which ranked among the biggest U.S. subprime lenders two year ago, has posted losses totaling $9.1 billion over the last eight quarters.
Without more support from GMAC, “substantial doubt exists regarding ResCap’s ability to continue as a going concern,” GMAC said.
GMAC executives didn’t take questions from analysts or investors, breaking a long-standing tradition.
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