By Karey Wutkowski and Corbett Daly
WASHINGTON, Dec 30 (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.
(To see government announcement, please click here.)
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.