Citing B&C Woes, ResCap Loses $910M in 1Q

Residential Capital LLC, the holding company for GMAC's residential lending affiliates, posted a stunning $910 million loss in the first quarter, citing deterioration in its U.S. subprime business.In a statement, ResCap said it has already reduced the size of its subprime holdings and "decreased its warehouse lending against nonprime collateral." It also said it would "sharply" curtail subprime production. "Amid the sharp downturn in the U.S. mortgage market, many of ResCap's nonprime assets were liquidated at a loss or marked substantially lower to reflect the severe illiquidity and depressed valuations in the prevailing market environment," the company said. "In addition, substantial incremental reserves were established during the quarter against various nonprime loans on the balance sheet." Among subprime lenders, Minneapolis-based GMAC-RFC ranked 12th last year, according to the Quarterly Data Report. GMAC-RFC is a correspondent buyer of subprime loans. ResCap can be found online at https://www.rescapholdings.com.