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GMAC said to be seeking more U.S. assistance

Bloomberg News

GMAC Inc., the home and auto lender, is discussing with the Obama administration an additional aid package of about $3 billion to $4 billion, according to a person familiar with the matter.

The size of the assistance remains under negotiation, the person said on condition of anonymity because the talks were private. A deal may be reached within days as Detroit-based GMAC incorporates losses from its home loan businesses, the person said. The objective is to restore the company to profit in the first three months of next year.

GMAC has already received two rounds of government aid totaling $13.5 billion as it struggled with losses at its mortgage operations, which include Residential Capital, known as ResCap.

The Obama administration regards the lender as crucial to the survival of the U.S. auto industry. General Motors Co., its former parent, and Chrysler Group rely on the firm to finance their vehicle buyers.

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“We have been conducting a strategic review of our business and evaluating options to address the challenges,” GMAC spokeswoman Gina Proia said Tuesday.

GMAC was ordered in May to raise as much as $9.1 billion in new capital after the government’s stress tests of finance companies. The U.S. gave the lender $3.5 billion toward that goal, leaving a capital hole as large as $5.6 billion.


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