WASHINGTON (Reuters) - The U.S. is injecting another $3.8 billion into GMAC Financial Services to help cover mortgage losses
, in a bailout that makes the government the majority owner of the auto and home finance company.
GMAC said after the capital infusion it does not expect to record more major losses from its mortgage lending unit, which should help stabilize results.
The company is one of the largest car loan makers in the United States, and earning profit will give it more capacity to make loans and eventually pay back the government.
Many analysts see GMAC's mortgage assets, which make up about a third of the company's $178.2 billion balance sheet, as the main obstacle to the lender reaching profitability
Those assets have already forced GMAC to seek new funds. Before Wednesday's capital infusion, GMAC had already received $12.5 billion of aid from the United States
Questions still remain for GMAC, though. The extent of future losses from its mortgage assets is not yet clear
, a bondholder said.
He added that the best route for GMAC to follow now would be to sell off GMAC's mortgage servicing business
, which collects payments from borrowers and is worth more than $3 billion on the company's books
The bondholder, who requested anonymity because he is not authorized to speak to the media, said the company could continue to make new home loans through its Ally Bank unit.
GMAC's remaining mortgage loans could be used to pay off coming debt
obligations linked to its Residential Capital unit, the investor added. If the assets don't perform well enough, that unit could go into bankruptcy
, he added.
GM sold a 51 percent stake in GMAC to private equity firm Cerberus in 2006, but held onto 49 percent of the company. Over time, GM's stake has been whittled down to 16.6 percent, including a trust managed for GM's benefit. Cerberus' stake is now 14.9 percent. The U.S. now holds 56.3 percent
, with the rest of the company being held by Cerberus investors.
The government previously held about 35 percent of the company's common stock.
GMAC's mortgage business lost nearly $600 million in the third quarter
, but its auto finance operations were profitable, earning about $164 million after taxes.