GMAC, the home and auto lender that counts the US government as the largest stakeholder, is discussing with the Obama administration a third bailout of up to $4bn (€2.8bn).

The size of the assistance is under negotiation. A deal may be reached in days as Detroit-based GMAC incorporates losses from its home-loan businesses, an observer said.

GMAC received two rounds of government aid totalling $13.5bn as it struggled with losses at home-mortgage operations, which include Residential Capital, known as ResCap.

The primary lender to General Motors, its former parent, and Chrysler is being helped by profits in auto-lending and is working to sell or restructure the ResCap unit.

“We question why GMAC needs this capital,” CreditSights analyst Adam Steer said.

“If you look at where the losses are coming from, it’s not coming from the core automotive business, it’s coming from the legacy portfolio at ResCap.” (Bloomberg)

Irish Independent

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