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GMAC Blames State of Economy for Widening Losses

November 11, 2008

Weighed down by losses in its mortgage division, GMAC Financial Services said its third-quarter loss widened to $2.52 billion. For the same period a year ago GMAC lost $1.6 billion.

Revenue for the captive finance company dropped 24 percent during the third quarter, as the tight credit market continued to make its impact felt. The company's automotive finance division reported a loss of $294 million, down from a profit of $554 million during the year-ago period.

Also impacting the company’s third-quarter financials was its ResCap mortgage lending division, which lost $1.91 billion compared to the year-ago period. The company said yesterday in a filing with the Securities and Exchange Commission that market conditions have raised substantial doubt about the viability of its Residential Capital LLC.

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