Wednesday, November 5, 2008

GMAC Mortgage in Trouble

The New York Times reports that the mortgage group GMAC is in trouble, posting it's 5th straight loss in 3rd quarter 2008. CEO Alvaro de Molina indicates GMAC is attempting to become a bank holding company in order to take advantage of some of the US government's $700 billion corporate handout package bailout fund.

What's it mean? The credit crisis is probably frar from over. Or rather, the fallout from the credit crisis is far from over. The LIBOR continues to improve (2.51% today, down from 4.82% in October), indicating increased liquidity in inter-bank lending, which is after all what we're told was the real crisis.

What if you have a GMAC mortgage? Don't worry or panic. Your mortgage payments are still due on the usual dates. If/when GMAC is sold off or absorbed, or whatever, you'll get a letter in the mail from the new owner of your mortgage loan. They'll tell you where to send your payments (believe me!). Until then, keep making payments on time, to the address you've always sent them to.

What if you're a GMAC employee? Polish the resume.