Ending months of speculation, General Motors Acceptance Corp. said that it would not sell its mortgage subsidiaries.
"We're committed to these businesses, and we're going to promote their ongoing success," said Terry Sullivan, a spokesman for GMAC.
Since late last year, the mortgage industry has been rife with reports that GMAC was seeking to sell GMAC Mortgage Corp. - a major originator and servicer - and Residential Funding Corp., a packager of mortgage securities.
Industry sources said a number of major mortgage lenders looked at the companies, and GE Capital Corp. often was cited as a leading bidder for the servicing business. But both GMAC and GE had declined to comment.
In the interview late Wednesday, Mr. Sullivan acknowledge that GMAC had conducted "a strategic review" of the mortgage units as part of an effort to shore up its finances.
Since then, GMAC's financial picture has improved, he said, and any discussions of selling the units have been dropped.
"We're going to retain these companies," Mr. Sullivan said.
As of the end of May, GMAC Mortgage Corp. of Elkins Park, Pa., had a servicing portfolio of $41.1 billion, Mr. Sullivan said.
The company originated more than $1 billion in home loans in the first six months of the year.
Residential Funding Corp., the Minneapolis-based securitizer, expects to purchase about $10 billion in home loans this year, he said.
Executive at the units were clearly pleased by the parent's action to halt speculation of a sale.
Richard Gillespie, a spokeman for GMAC Mortgage, said that market rumors had been a distinction for the company. "At times it's been difficult," he said.
Now, he said, "We can give our full concentration to growing our business and improving our profitability."