GMAC loans sell-off paves way for exit

By Simon Watkins, Mail on Sunday Financial Deputy Editor
Last updated at 1:40 AM on 21st March 2010

Business lender GMAC Commercial Finance is selling its British loans as it plans to quit the country by the end of the year.

The American finance group made headlines in 2008 when it was among the lenders that pulled the plug on Woolworths, prompting its collapse.

The company, once part of US car giant General Motors, has already sold most of its British business loans book, which was once worth up to £250million, and has pulled out of most of its regional offices.

Victim: GMAC lent to Woolworths

It will move from its head office in Brighton to a smaller site next month as it draws nearer to a closure of the British operation.

GMAC Commercial Finance has also been a major lender to Focus DIY and fashion chain Jaeger. It specialises in lending to mediumsized businesses, offering loans of up to £300 million.

GMAC's residential mortgage business, GMAC RFC, became a significant lender to sub-prime and buy-to-let British homebuyers in the boom.

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Unexpected £3bn loss for GMAC (thisismoney.co.uk)

It sold on many of its mortgages to other High Street lenders, including Bradford & Bingley, which ended up with billions of pounds of GMAC mortgages.

These are now part of the rump B&B business still owned by the taxpayer. On Friday, B&B said that 5.5 per cent of its loan book was in arrears, which is much more than the average for the banking sector. GMAC RFC stopped offering new mortgages in Britain and the group is thought to be looking for possible buyers of its remaining British mortgage book.

Last year, the FSA fined GMAC RFC £2.8million and told it to repay £7.7million to those customers that it was deemed to have treated unfairly.