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Mortgage Unit Produces Loss for GMAC

DETROIT, May 2 (Reuters) — General Motors former finance arm, GMAC, posted a first-quarter loss on Wednesday as pressure on the mortgage market forced the company to take charges at its housing finance unit.

GMAC, in which G.M. retains a 49 percent stake, posted a net loss of $305 million, in contrast to a profit of $495 million a year earlier.

GMAC’s mortgage unit, ResCap, posted a quarterly loss of $910 million, more than offsetting gains from its insurance and auto finance divisions, which earned $605 million.

GMAC said it had taken steps to lower the risks for ResCap by selling off subprime mortgages at a loss, marking down its remaining portfolio and curtailing new loans to borrowers with weaker credit.

Even so, the loss prompted Moody’s and Fitch Ratings to cut their outlooks on ResCap.

The company also injected $500 million into ResCap in the first quarter and another $500 million last month. That $1 billion infusion was financed by G.M., to complete the sale of GMAC to an investment group led by Cerberus Capital Management.

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