GMAC posts $724 million fourth-quarter loss

GMAC Financial Services said today it swung to a loss during the fourth quarter as homeowners struggled to keep up with mortgage payments. GMAC Financial Services lost $724 million in the fourth quarter, compared with earnings of $1 billion in the prior year period.

Residential lending division, Residential Capital LLC, lost $921 million during the quarter because of continued deterioration in the housing market. Losses skyrocketed at the division because of write-downs on credit residuals and mortgage-backed securities, restructuring charges and higher funding costs.

The decline was partially offset by $521 million in gains tied to the retirement of debt.

GMAC said it continues to review strategic alternatives for its residential lending business. Detroit News