Residental Capital, the mortgage lending unit of GMAC, said today that it needs as much as $1.4 billion in cash by the end of June in order to meet liquidity demands, according to a regulatory filing with the Securities and Exchange Commission.
ResCap initially estimated it would only need to raise $600 million by June 30, but an inability to close asset sales and losses on some hedges raised the amount to $1.4 billion.
Since the mortgage lending markets deterioration beginning in mid-2007, ResCap has experiences significant losses, and continues to do so, reporting an $859 million first quarter loss.
Residential Capital has increased the size of an existing credit facility with parent GMAC, to which it is also selling some of its assets in an attempt to meet the cash requirements.
