GMAC expects to post $5 billion loss

Troubled auto lender GMAC on Tuesday said it expects to suffer a fourth-quarter loss of about $5 billion, mostly because of struggles in its mortgage division.

The company said in an investor presentation that the loss is driven by a $3.8 billon pre-tax charge that largely reflects the decline in the value of its mortgage-related investments, which GMAC said it intends to sell.

Tuesday's announcement came a week after the Detroit-based company received an additional $3.8 billion in federal aid. GMAC has been unable to raise from private investors the money it needs to curtail losses. The government's latest infusion pushed the company's direct federal aid to $16.3 billion. In addition, the Treasury Department said it would increase its stake in GMAC to 56 percent from 35 percent.

The additional aid highlighted both the company's ongoing struggles and its importance to the administration's efforts to revive the auto industry. GMAC is the largest lender to General Motors and Chrysler dealerships and to their customers.

While it was created to finance GM auto sales, GMAC also focused heavily on mortgage lending during the housing boom. The company, no longer owned by GM, lost $13 billion during the past three years as borrowers defaulted on those loans.

Cerberus, the private-equity firm that bought GMAC from GM in 2006, still owns a 15 percent stake in the company and could benefit if the latest round of government aid helps the company return to profitability.