ResCap Is Drag on GMAC Results

GMAC Financial Services posted a fourth quarter loss of $724 million, blaming its weak results on fallout from the "continued disruption in the mortgage, housing and capital markets." Residential Capital, a subsidiary of GMAC Financial Services, lost $921 million in the fourth quarter. Write-downs of credit residuals and mortgage-backed securities, higher funding costs, impairment of real estate assets and equity investments, and restructuring charges all took a bite out of ResCap in the fourth quarter. ResCap unloaded some $22 billion of securitized assets and related collateralized-debt obligations from its balance sheet during the fourth quarter. ResCap said that it eliminated 5,000 jobs, or 35% of its workforce, in 2007.