General Motors Acceptance Corporation

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GMAC

Type	Private
Founded	1982
Headquarters	Detroit, USA
Key people	Eric Feldstein CEO
Industry	Financial Services
Products	Mortgage loans
Revenue	$19.2 Billion (2005)
Net income	$2.4 Billion (2005)
Employees	33,900 (2005)
Website	www.gmacfs.com

General Motors Acceptance Corporation (or GMAC) was the financial services arm of General Motors, the world's largest automobile manufacturer (by revenue).

GMAC Financial Services provide a suite of financial programs including automotive financing, insurance and mortgage operations in 40 countries around the world.

GMAC also operates Nuvell Financial Services within its automotive financing division. While the main GMAC obviously specializes in the financing of new and "certified used" GM vehicles, Nuvell is for rival auto companies that do not have a financial arm, as well as for late-model used cars from dealerships that use bank financing. Kia Motors America is one of the companies to use Nuvell for their new vehicle sales.

Its other businesses include ResCap Holding, an umbrella company for GMAC's residential mortgage business, and GMAC Home Services, a real estate services subsidiary. As well, it is an associate sponsor of all Hendrick Motorsports racing teams.

ResCap Holding is the parent for GMAC Mortgage, GMAC-RFC, GMAC Bank, Ditech.com, and Homecomings Financial.

GMAC Home Services is the parent for GMAC Real Estate, formed by the purchase of Better Homes and Gardens Real Estate in 1998, GMAC Global Relocation Services, and GHS Mortgage.

[edit] Divestiture

In order to raise money for a reorganization, General Motors has been divesting of many assets including GMAC. This divestiture was accelerated at the prompting of investor Kirk Kerkorian and his former representative on GM's board, Jerome York.

On March 23, 2006, General Motors announced that it completed the sale of a 78% interest in GMAC Commercial Holding, its commercial real estate subsidiary, for $1.5 billion in cash to a private investment group including Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners. The deal includes the payoff of all intracompany debt owed to GMAC, bringing the total value of the deal to $9 billion. The new entity, in which GMAC owns a 21% interest is known as Capmark Financial Group, Inc.

On April 3, 2006, GM announced that it would sell 51% of GMAC as a whole to a consortium led by Cerberus Capital Management, raising $14 billion over 3 years. Investors also include Citigroup's private equity arm and Aozora Bank of Japan. The group will pay GM $7.4 billion in cash at closing. GM will retain approximately $20 billion in automobile financing worth an estimated $4 billion over three years.

The sale was completed in December of 2006.

[edit] 1994 GMAC Fraud

In 1994, GMAC was the victim of a $6 billion dollar scandal involving a Long Island Buick Dealer named John McNamara. McNamara borrowed the money over the course of 11 years, taking out loans for vans that did not exist.