Standard&Poor's Ratings Services' ratings on GMAC Inc. reflect the significant risks facing the company, including recent asset-quality deterioration in its auto portfolio; the ongoing stress at GMAC's 100% mortgage lending subsidiary, Residential Capital LLC (CCC/Developing/C); uncertainty related to any benefits from GMAC's close business ties to General Motors (GM; D/--); and funding, which is a long-term issue relieved in the near term by government support. Longer-term, we believe current events illustrate the weakness inherent in GMAC's wholesale funding profile (we consider brokered and direct-to-consumer deposits as sharing key characteristics of wholesale funding), which exposes the company to funding volatility in times of stress. In addition, the high cost of funding exerts pressure to generate high asset yields to
