GMAC Will Sell Insurance Unit to American Capital

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GMAC Will Sell Insurance Unit to American Capital

Oct. 19 GMAC Inc., the lender that received two U.S. bailouts, will sell its property-casualty insurance business to American Capital Acquisition Corp. after posting losses in seven of the past eight quarters.

The deal includes GMAC operations insuring cars, commercial fleets and recreational vehicles, the lender said in a regulatory filing today; terms weren’t disclosed. AmTrust Financial Services Inc., a New York-based insurer, said separately it will invest $42.5 million in American Capital, which will double its sales force.

GMAC is selling insurance units as it tries to rebound from losses tied to home and auto loans. The Detroit-based lender reached a deal in November to sell a reinsurance business and two insurance units to Maiden Holdings Ltd.

More Here:

GMAC Will Sell Insurance Unit to American Capital (Update1) - Bloomberg.com

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GMAC: Most Chrysler dealers to qualify for new loans

Posted Monday, Oct 19, 2009, 2:18 pm in Company, Employee News

GMAC Financial Services President Bill Muir said Sunday that the number of Chrysler dealers expected to close because they don’t qualify for new loans through the lender is likely to be small, The Detroit News reported.

GMAC was designated the new finance company for Chrysler Group LLC dealers after the automaker filed for bankruptcy, the paper noted. The News reported Saturday that some dealers said they had been told by GMAC and Chrysler officials that hundreds of dealers were at risk of not being able to finance with GMAC.

The U.S. Treasury Department, which provided loans to bankrupt Chrysler to continue operations, said the automaker’s former captive finance company, Chrysler Financial, could no longer offer “floor plan” financing to Chrysler’s 2,400 dealers, the News said. That’s a line of credit dealers use to buy vehicles to stock their showrooms, the story said.

Instead, GMAC, (which is technically a bank), was named the preferred lender and would provide floor plan financing, as well as consumer loans, the paper said. GMAC provided temporary floor plan loans, with the goal of approving by mid-November permanent loans to the 1,500 dealers who applied for them, the story said.

“Nearly 900 have completed the process to convert from the interim to post-interim wholesale credit lines,” Muir told the News. “The vast majority of the remainder are approved, and GMAC is completing dealership visits and documentation to finalize the loans. . . . It is possible that a select number may not qualify during this final step, but we expect the vast majority to be completed.” Muir told the paper that GMAC is “working aggressively” to support the Chrysler dealer body. (The Detroit News)