On Nov. 5th, 2008 GMAC Financial Services reported a 2008 third quarter net loss of $2.5 billion, compared to a net loss of $1.6 billion in the third quarter of 2007.

GMAC Financial Services is a global finance company operating in and servicing North America, South America, Europe and Asia-Pacific. GMAC specializes in automotive finance, real estate finance, insurance, commercial finance and online banking

GMAC was founded in 1919 as a wholly owned subsidiary of General Motors Corp. GMAC was established to provide GM dealers with financing necessary to acquire and maintain vehicle inventories as well as to provide GM customers funds to finance vehicle purchases. GMAC products and services had expanded significantly since then and include: the automotive financing arm, real estate financing through their wholly owned subsidiary, Residential Capital, LLC (ResCap) and insurance in which GMAC offers automobile extended service and maintenance contracts, personal automobile insurance coverage, selected commercial insurance coverage and other consumer products as well as providing certain reinsurance coverage.

As of Dec. 31, 2007, the organization had $249 billion in assets and serviced 15 million customers.

Per the third quarter news release form GMAC, the following highlights were included.

Revenues were $4.6 billion.  Total net loss was $2.5 billion. GMAC’s auto finance business lost $294 million.  ResCap, which ranked among the biggest U.S. subprime lenders two year ago, has posted a loss of $1.9 billion for the quarter and $4.6 billion for the first nine months of 2008.

The poor results were primarily attributable to a significant loss at Residential Capital, LLC as adverse market conditions domestically and internationally continued to affect the mortgage business. GMAC’s automotive finance operation also experienced pressure from lower used vehicle prices and weaker consumer and dealer credit performance. Other items affecting results were realized losses and valuation adjustments on assets held for sale and certain other investment securities as a result of illiquidity in the credit and capital markets. These items were partially offset by profitable results in the insurance businesses.

GMAC Bank assets and deposits continue to grow at a measured rate with total assets of $32.9 billion at quarter-end, which includes $8.5 billion of assets at the auto division and $24.4 billion of assets at the mortgage division.  This compares to $31.9 billion at June 30, 2008.  Deposits also increased in the third quarter to $17.7 billion at Sept. 30, 2008, compared to $16.9 billion at the end of the second quarter.

GMAC previously disclosed it is in discussions with federal regulatory authorities regarding, among other things, seeking bank holding company status under the Bank Holding Company Act of 1956, as amended. In conjunction with this initiative, GMAC intends to commence a private offer to exchange a significant amount of outstanding indebtedness for a reduced principal amount of new indebtedness.

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