Sept. 25 (Bloomberg) -- GMAC LLC's best chance of riding out the financial crisis intact may involve the lender finding its way into the U.S. government's $700 billion bank-rescue plan, analysts say.

While Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke try to sell the package to Congress, Detroit-based GMAC is burning through cash and its bonds have fallen to a record low. The biggest drain is GMAC's Residential Capital LLC home-lending unit, which lost $1.9 billion in the second quarter -- 2-1/2 times more than the auto loan unit.

``Internally, everyone's got to be hoping like heck they make it into the bailout program,'' said David Lykken, co-founder of Mortgage Banking Solutions, an Austin, Texas-based consulting firm. ``That is probably the only option they have at this point.''

GMAC, co-owned by General Motors Corp. and Cerberus Capital Management LP, had more than two-thirds of its $227 billion in assets wrapped up in business and consumer loans, including mortgages, at the end of June. Some loans, which have contributed to $5.4 billion in losses over the past year, may be removed from the balance sheet if and when legislation is passed for the government to purchase assets.

GMAC spokeswoman Gina Proia declined to say if the company is seeking inclusion in the plan. ``We've met all obligations to date and we intend to continue honoring our commitment to investors,'' Proia said.

The Treasury is pushing to let regulated financial institutions participate in the plan without specifying the number and exact types of companies that will be included.

Mortgage Losses

While GMAC's auto lending is suffering from dwindling truck sales at GM, home foreclosures account for the majority of the company's losses. Minneapolis-based ResCap, the 12th biggest U.S. subprime lender in 2006, has lost $7.2 billion in the past seven quarters, compared with a $4.4 billion deficit for the company as a whole. With $65 billion in assets, ResCap is less than half the size of the global auto business, which has $169 billion in assets, according to GMAC.

``At this point, anybody who is buying that debt is betting on a bailout, not on anything else,'' said Julian Mann, a mortgage- and asset-backed bond manager at First Pacific Advisors LLC in Los Angeles, which oversees $10.5 billion.

Paulson and Bernanke have urged lawmakers to quickly pass the Troubled Asset Relief Program to prop up the credit markets after the demise of Lehman Brothers Holdings Inc. and takeover of American International Group Inc., both based in New York.

GMAC's Liabilities

GMAC said it has about $12 billion of bonds due by the end of next year and another $6 billion maturing in 2010. The company disclosed liabilities of $215 billion at the end of June, while cash fell to $14.3 billion from $17.7 billion at the end of 2007.

GMAC also owns GMAC Bank, which ``provides critical low-cost financing for high-quality mortgages and auto assets,'' according to second-quarter statements. GMAC Bank had $31.9 billion in assets and $16.9 billion in deposits at midyear.

In June, GMAC arranged more than $60 billion of new and refinanced credit after rising foreclosures left ResCap on the brink of bankruptcy. Since then, Standard & Poor's lowered GMAC's credit rating and Moody's Investors Service cut ResCap's rating on cash concerns.

GMAC's $2.5 billion of 7.75 percent notes due in 2010 fell 4.25 cents on the dollar, or 6 percent, to 66.75 cents at 4 p.m. New York time, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds, which have tumbled 17 percent this month, yield 43.8 percent, or 42 percentage points more than similar-maturity Treasuries, according to Trace.

Mortgage Business

GMAC is trimming mortgage operations to free up cash. The company on Sept. 23 sold its home-services unit to Toronto-based Brookfield Asset Management Inc. and earlier this month dismissed 5,000 ResCap employees and closed all 200 GMAC Mortgage retail offices. ResCap said in June it has $275 million in debt maturing this year and $618 million in 2009.

On Sept. 19, the day the rescue was announced, GMAC renewed a credit facility with New York-based Citigroup Inc., giving the lender access to $13.8 billion, down from $21.4 billion a year earlier. GMAC can tap $10.1 billion immediately, compared with $14.4 billion in the previous facility.

The auto market isn't helping. GM, the world's biggest carmaker, announced plans last week to draw the remaining $3.5 billion from a revolving credit line. Citigroup analyst Itay Michaeli wrote that ``second-half cash burn remains quite severe.''

Depressed Sales

Sales are depressed ``and they have a huge operation to fund on a regular basis,'' said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania.

Chrysler LLC President Jim Press said this week the third- largest U.S. automaker has talked with U.S. officials about whether the rescue would include auto loans. The American Financial Services Association said it is lobbying Congress on behalf of automakers.

GM CEO Rick Wagoner told reporters at a factory announcement in Flint, Michigan, today that anything to ``loosen up that logjam'' in auto credit will help.

``GMAC may benefit from this,'' said Mirko Mikelic, senior portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan, which oversees $22 billion in assets, including GM and Ford Motor Co. bonds. ``Everybody's waiting.''

To contact the reporters on this story: Ari Levy in San Francisco at alevy5@bloomberg.net.

Last Updated: September 25, 2008 16:25 EDT