GMAC's Mortgage Unit Loses $747M in Q309
GMAC Financial Services (GJM) lost $767m in Q309, compared to a net loss of $2.5bn in Q308. The Q309 loss was due primarily to legacy assets in GMAC’s mortgage operations. The unit experienced a pre-tax loss from continuing operations of $747m during the quarter. The loss is an improvement from Q308’s $1.9bn pre-tax loss from continuing operations. “We continue to work through solutions for certain legacy assets and that is still weighing on GMAC's financial performance,” said CEO Alvaro de Molina. “Progress is being made toward the transformation of the company as we shed non-strategic operations while at the same time invest in structuring the company to be more competitive for the long term.” GMAC said credit provisions are moderating, but its mortgage business increased repurchase reserves in Q309, at an expense of $515m. Mortgage origination was $15.9bn in Q309, down from $18.8bn in Q209, but up from $11.9bn in Q309. GMAC said it initiated 31,720 trial modifications through the Making Home Affordable Modification Program (HAMP). Write to Austin Kilgore.