ResCap drives GMAC loss in Q4

Fallout from the subprime-mortgage mess continued to batter GMAC Financial Services' Residential Capital (ResCap) unit in Bloomington, the lender said Tuesday as it reported a fourth-quarter loss.

GMAC reported a loss of $724 million, as compared to income of $1 billion a year ago. ResCap was responsible for that dismal performance, losing $921 million in the fourth-quarter, compared to a loss of $128 million in the same period a year ago. GMAC's other divisions, Global Automotive Finance and Insurance, were both profitable in the fourth quarter. For the year, ResCap lost $4.3 billion, dragging down GMAC to a $2.3 billion loss.

GMAC cited "continued disruption in the mortgage, housing and capital markets" as a reason for the loss.

The Business Journal reported recently that Detroit-based GMAC Financial Services is considering "strategic alternatives" for its subsidiary Residential Capital (ResCap).

GMAC confirmed Tuesday that it is in confidential talks with various parties about some of the businesses at ResCap.

ResCap has been aggressively restructuring its finances and laying off employees, cutting its workforce by 5,000 in 2007. Its fourth-quarter losses were partially offset by a $521 million gain from retiring $1.5 billion in face-value debt.

ResCap's total loan production fell 58 percent to $20.8 billion in the fourth quarter, while new U.S. subprime loans fell to $100 million from $6.9 billion.

ResCap's North American 30-day delinquency rate on managed loans grew to 2.67 percent from 2.35 percent.