NEW YORK — — GMAC LLC, the financing arm of auto maker General Motors Corp., said Thursday that it has made process in restructuring its ailing home mortgage subsidiary, but didn't go as far as to guarantee its future.
Residential Capital LLC, which has posted billions in losses this year, remains an important part of GMAC, the finance company said in a filing with the Securities and Exchange Commission.
“GMAC believes that the support it has provided to ResCap to date was in the best interests of GMAC stakeholders,” the company wrote. “If ResCap were to need additional support, GMAC would provide that support so long as it was in the best interests of GMAC stakeholders.”
GMAC, which provides financing for GM dealers and customers in addition to home mortgage loans, said late last year that it could fail if it didn't become a bank holding company and eligible for a piece of the federal government's $700-billion (U.S.) bank rescue package.
On Christmas Eve, the Federal Reserve granted GMAC bank status and the Treasury Department subsequently gave the company $5-billion in assistance. The Treasury also said it would lend up to $1-billion to GM so that the auto maker would be able to buy more equity from GMAC.
“While there can be no assurances, GMAC's recently approved status as a regulated bank holding company has increased the importance of its support for ResCap,” GMAC said in Thursday's filing.
Analysts had speculated that GMAC could shut down ResCap in an attempt to cut its losses and stave off bankruptcy. The division accounted for $1.91-billion of GMAC's $2.52-billion third-quarter loss.
In September, GMAC announced plans to close all of its 200 retail offices and lay off about 5,000 employees, with the bulk of those job cuts coming at ResCap, as part of a plan to reduce its mortgage lending and servicing in the face of the continued housing industry slump.
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