GMAC Financial Services announces huge losses

GMAC Financial Services, formerly known as General Motors Acceptance Corporation, announced losses in the fourth quarter because of homeowners’ efforts to keep up with mortgage payments.

Photo: GMAC Financial Services announces huge losses

The company lost $724 million as opposed to its earnings of one billion dollars in the same period of the previous year.

The decline was partially offset by $521 million in gains tied to the retirement of debt.

The auto lending division earned $137 million during the quarter, while the insurance division posted earnings of $68 million. For the full year, GMAC lost $2.3 billion, compared with earnings of $2.1 billion in 2006. In 2008 the company expects to return to profitability.

GMAC Financial Services was previously the wholly owned financial services arm of General Motors. GMAC Financial Services provide a suite of financial programs including automotive financing, insurance and mortgage operations in 40 countries around the world.

GMAC also operates Nuvell Financial Services within its automotive financing division. While the main GMAC specializes in the financing of new and Certified Pre-Owned ("used") GM vehicles, Nuvell is for rival auto companies that do not have a financial arm, as well as for late-model used cars from dealerships that use bank financing. Kia Motors America is one of the companies to use Nuvell for their new vehicle sales.

Its other businesses include ResCap Holding, an umbrella company for GMAC's residential mortgage business, and GMAC Home Services, a real estate services subsidiary. As well, it is an associate sponsor of all Hendrick Motorsports racing teams.

ResCap Holding is the parent for GMAC Mortgage, GMAC-RFC, GMAC Bank, Ditech.com, and Homecomings Financial.

GMAC Home Services is the parent for GMAC Real Estate, formed by the purchase of Better Homes and Gardens Real Estate in 1998, GMAC Global Relocation Services, and GHS Mortgage.