GMAC, owner of Costa Mesa-based Ditech.com and formerly a unit of General Motors, posted a $724 million loss in Q4 as home owners missed loan payments, reports Bloomberg. Here’s more…
The net loss compares with a profit of $1 billion a year earlier, the Detroit-based company said in a statement today. GMAC said it’s talking to buyers for parts of the Residential Capital mortgage unit, which recorded a $921 million quarterly loss.
GMAC vowed today to make money in 2008 after falling home prices and record U.S. foreclosures led to a $2.3 billion companywide loss for 2007. Provisions for bad mortgages probably will decrease this year, GMAC predicted. The auto finance unit remained profitable, overcoming a 6.1 percent decline in GM’s North American auto sales last year.
“While results were weak, we suspect investors will take some encouragement from GMAC’s expectation of profitability in 2008,” said Himanshu Patel, an analyst at JPMorgan Chase & Co.
ResCap’s future may include acquisitions, sales, alliances and joint ventures, GMAC said. Discussions are in various stages and GMAC said it’s unclear whether any transaction will result. The unit lost $4.3 billion for the full year.
ResCap is the unit of GMAC that controls Ditech. It’s units could be sold, form alliances or even buy other companies, reports Bloomberg, which writes that its loss was due to “a higher provision for bad loans, fewer new mortgages and markdowns on the value of securities and loans held for sale.”
For what I wrote on Ditech’s last job cuts, CLICK HERE.
To read the full Bloomberg story CLICK HERE.
this subprime mess just keep getting worse.
a recession is now in sight and it can be painful for a lot of people.
I think its here. We are just in that river in Egypt called denial.
the sale of Ditech has been in the works since i was there in 2004. its always been a possibility. however, i know from speaking with people in their HR dept that they are currently hiring agents and processors so business isn’t doing that bad their considering their conservative approach to hiring agents.
The ISM reading confirmed it this morning. And it’s worse than they say! Bailouts are the only way to keep the monolines and banks from failing. It will happen, Bush can’t let the country head for depression during election year.
A lot of innocent people are paying for this mess. Then Bush thrown out a budget with a 400 billon deficit…Follow the money…the crooks start at the top
What business does a auto manufacturer have in mortgage financing? if you are going to get involved in activities outside your sphere of expertise, then you should plan on losses as well.
Louis,
It seems ridiculous but GMAC got into the mortgage business because several studies were done that showed that shortly after someone buys a home they also buy a new car. They figured, might as well keep it in the family.
Kim Curtis
California Mortgage Loans
http://www.LoanChatLive.com
There were all studies showing how Japenese auto makers were gaining much ground on GMAC & Ford……maybe they should have paid more attention to that report.
Louis
Maybe the new jingle should be “ooh, lost another loan at Ditech”
That is funny.
Has anyone had any major problems with Ditech mortgage company? I have read so many BAD blogs on Country Wide that I’d have to be an idiot to go with them. Does anybody have anything bad to say about Ditech?
I am reading so many bad things about Country Wide Mortgage but so far I have not read about anybody having any bad experiences with Ditech Mortgage. Has anyone had any bad experiences with Ditech?