Sluggish auto finance hurts GMAC

GMAC Financial Services said Tuesday its first-quarter loss widened as its automotive finance business weakened -- though results improved slightly in its struggling mortgage operations.

GMAC (GOM) is majority owned by private equity firm Cerberus Capital Management. General Motors Corp. (GM, Fortune 500) owns a minority stake in the financial services firm, though GMAC's mortgage difficulties of late have weighed on GM's results.

GMAC lost $589 million during the first quarter of 2008, compared with a loss of $305 million during the same period the previous year.

The automotive finance division earned $258 million during the first quarter, a 35% decline from the year-ago period. GMAC cited weaker credit performance, including rising credit loss provisions and rising costs tied to restructuring operations.