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| GMAC Financial Services reported a significant improvement in its mortgage operations. The company said it continues to support subsidiary Residential Capital LLC.First-quarter residential production was $13.2 billion, according to earnings data reported today. In addition to ResCap, mortgage originations included business from GMAC Bank and ResMor Trust.
Fundings jumped from $8.2 billion in the fourth quarter — reflecting heightened refinance activity. But volume sank from $18.7 billion a year earlier, which GMAC attributed to business-line closures and tighter underwriting. Government business accounted for 36 percent of fourth-quarter production, slightly higher than 35 percent in the prior period. GMAC expects to boost its originations further with its re-entry into the prime jumbo mortgage market in April. It also expanded its warehouse business. The primary U.S. servicing portfolio ended March at $359.3 billion, easing from $365.0 billion at the end of December. Mortgages held for investment stood at $25.4 billion on March 31, edging down from $25.9 billion on Dec. 31. There was an $0.1 billion first-quarter loss in the mortgage operations, improving from the $1.0 billion loss in the prior period and the $0.9 billion loss a year earlier. GMAC noted it forgave $1.3 billion in ResCap debt as part actions that included the acquisition of ResCap’s interest in GMAC Bank. GMAC continues to provide support to ResCap as it evaluates capital and liquidity needs at the unit. In its annual earnings report, GMAC discussed what its position would be in a ResCap bankruptcy. Today’s report suggests a more optimistic outlook for the unit. GMAC had an $0.7 billion loss, sinking from a $7.5 billion profit in the fourth quarter and slightly worse than the $0.6 billion loss during the first-quarter 2008. Average headcount as of March 31 was down 57 percent from 12 months earlier. |
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