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Apr 24, 2008 12:26 pm US/Central
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GMAC Loans ResCap Mortgage Unit $468 Million
MINNEAPOLIS (AP) ―
Troubled mortgage lender Residential Capital has already tapped much of a new $750 million line of credit offered by its parent GMAC.
Bloomington-based ResCap has serious financial problems because it was a major subprime lender.
In a new Securities and Exchange Commission filing, GMAC says it has been looking for ways to help ResCap, including refinancing its debt and finding new lenders.
The collateral on the new line of credit is the mortgage servicing rights of two ResCap subsidiaries. Those subsidiaries have already borrowed $468 million under the new line of credit, which lasts six months.
Residential Capital LLC lost almost $4.4 billion last year because of mortgage-related write-downs, restructuring charges, and higher borrowing costs.
GMAC is majority-owned by Cerberus Capital Management LP, with General Motors Corp. the minority owner.
(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)