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Finance company GMAC lost $2.52 billion in the third quarter, hurt by slumps in the housing and auto markets, and said its Residential Capital mortgage unit may fail.
GMAC has been in the red for five straight quarters, losing $7.9 billion over that time. ResCap lost $1.91 billion in the third quarter and has lost $9.1 billion over the last two years.
Despite halting many risky loans and cutting 10,000 jobs over two years, ResCap is struggling to maintain sufficient capital and liquidity. GMAC excused $197 million of its obligations in the third quarter, and more in October.
"Absent economic support from GMAC, substantial doubt exists regarding ResCap's ability to continue as a going concern," GMAC said.
Private equity firm Cerberus Capital Management owns 51 percent of Detroit-based GMAC, and the automaker General Motors [ GM 0.06 
+0.0 (+0.00%) ] owns 49 percent.
"If GMAC can't provide support that ResCap needs, then bankruptcy is an option for ResCap," said Christopher Wolfe, an analyst at Fitch Ratings. "GMAC is running out of options. There is a limit to how much support GMAC can provide, and we don't believe it can provide the support it has historically."
The fates of ResCap and GMAC also depend on a potential merger of GM with Chrysler LLC, also controlled by Cerberus.
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