2 Jan 2010

More funding for GMAC

11:02 am on 2 January 2010

The US finance group, GMAC, is to receive a further $US3.8 billion from the federal government to cover losses incurred on its mortgages.

The money is in addition to $US12.5 billion the company has already been given.

GMAC is the former finance arm of General Motors. The BBC reports a third of its balance sheet is mortgage finance.

General Motors is one of the companies worst hit by the financial downturn. In December 2008, the federal government stepped in with a $US6 billion bail-out.

In May 2009, the Treasury announced that it would provide billions more in aid.

GMAC became an independent finance company in 2006 after GM sold a 51% stake in the business.

Its mortgage business, Residential Capital, known as ResCap, has lost $US10 billion in the past three years.