GMAC posts wider quarterly loss as loan defaults rise!
NEW YORK - August 4, 2009 - GMAC Inc., the lender that received $13.5 billion in government bailout funds, reported a $3.9 billion second-quarter loss tied to rising loan defaults and said part of its insurance operations may be sold.
The loss, GMAC’s seventh in the past eight quarters, rose from $2.48 billion a year earlier. Results included a $1.2 billion tax charge caused by converting to a corporation, the Detroit-based company said today in a statement. The auto-finance unit’s loss increased to $727 million from $717 million, while the deficit from mortgage operations shrank to $1.84 billion from $1.9 billion, GMAC said.
The Depression drove up defaults on home and auto loans, and operations will be trimmed to save $1 billion annually by 2010, GMAC said. The U.S. took a 35% stake earlier this year, enabling GMAC to keep lending to customers of General Motors Corp. and Chrysler Group LLC after the automakers entered bankruptcy. While government incentives boosted car sales and GMAC’s revenue, losses on older loans are hobbling profit.
The loss, GMAC’s seventh in the past eight quarters, rose from $2.48 billion a year earlier. Results included a $1.2 billion tax charge caused by converting to a corporation, the Detroit-based company said today in a statement. The auto-finance unit’s loss increased to $727 million from $717 million, while the deficit from mortgage operations shrank to $1.84 billion from $1.9 billion, GMAC said.
The Depression drove up defaults on home and auto loans, and operations will be trimmed to save $1 billion annually by 2010, GMAC said. The U.S. took a 35% stake earlier this year, enabling GMAC to keep lending to customers of General Motors Corp. and Chrysler Group LLC after the automakers entered bankruptcy. While government incentives boosted car sales and GMAC’s revenue, losses on older loans are hobbling profit.
