NEW YORK (AP) -- GMAC Financial Services said Wednesday its third-quarter loss widened to $2.52 billion, as the ongoing woes of the global credit industry resulted in another quarter of steep losses at its mortgage division.
The beleaguered finance arm of General Motors Corp. also warned that its mortgage lending division, ResCap, could fail.
For the year-earlier period, GMAC had a loss of $1.6 billion. Revenue tumbled 24 percent in the latest quarter to $1.72 billion from $2.25 billion.
The results are likely to have an impact on GM when it reports its third-quarter earnings on Friday. Citigroup analyst Itay Michaeli said he expects Detroit-based GM to record a loss of about $1.2 million related to its stake in GMAC.
Robert Hull, the New York-based company's chief financial officer, said tough credit conditions, turmoil in the capital markets, the deterioration of home prices and continued problems in the automotive industry wreaked havoc on the lending industry as a whole during the quarter.
In particular, the lack of available funding forced GMAC to scale back its lending for automotive loans during the quarter, he said.
"We've been forced to make painful choices about curtailing leases and restricting certain retail lending while we look for new sources of capital," Hull said in a conference call with investors.
GMAC is 51 percent owned by private equity firm Cerberus Capital Management LP, while GM holds the rest. Cerberus also is the majority owner of Chrysler LLC.
