Nov. 17 (Bloomberg) -- GMAC Inc., the lender seeking a third taxpayer bailout, must focus on auto financing and find a “solution” to its money-losing mortgage business, newly appointed Chief Executive Officer Michael Carpenter said.

“The first priority is we have to make GMAC the premier auto-finance company,” Carpenter, 62, said in an interview yesterday. Secondly, “the mortgage business has been a drag on the company and we need to find a solution,” he said.

Carpenter’s goal for auto finance matches government policy, which deemed Detroit-based GMAC necessary for the survival of General Motors Co. last December. The U.S. financed two GMAC bailouts totaling $13.5 billion and had been negotiating another injection worth as much as $5.6 billion. As for the Residential Capital LLC mortgage unit, investors, analysts and even GMAC have been speculating about bankruptcy.

“The government is running into bailout fatigue and GMAC is realizing it can’t rely on this pool of support from the taxpayers,” said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania. “The easiest group of assets to jettison, if you want to call them assets, is ResCap. They’ve been a source of a huge amount of embarrassment and pain.”

Carpenter, who ran Citigroup Inc.’s alternative investment unit until he quit in 2006, replaced Alvaro de Molina, 52, who resigned yesterday. GMAC also said it asked the Treasury to delay a new injection from the Troubled Asset Relief Program until Carpenter assesses GMAC’s needs.

New Infusion

The new CEO doesn’t see “any need for the maximum amount of capital that Treasury was anticipating putting in,” he told the New York Times. “The $5.6 billion is off the table. What the exact number is, I don’t know.”

The U.S. is the biggest owner of GMAC, with a 35.4 percent stake. GMAC’s former parent, General Motors, holds a 9.9 percent stake; the U.S. controls the Detroit-based automaker. Cerberus Capital Management LP, the New York-based investment firm, holds 22 percent. GMAC doesn’t have publicly traded shares.

GMAC Chairman Franklin W. Hobbs asked de Molina to leave during a midday meeting yesterday, the Wall Street Journal reported, citing people familiar with the matter. The government had cited GMAC’s management last year, when de Molina was running the company, as one reason for approving the bailout. The U.S. didn’t play a role in his dismissal, said Andrew Williams, a Treasury spokesman.

“Everyone is very respectful of what Al has done, and the priorities are different going forward,” Carpenter said. “The company needs a very strong strategic direction, a turnaround orientation and an operational orientation.” De Molina declined to comment via e-mail.

Carpenter’s History

Carpenter was named to the board in May as part of the lender’s agreement to become a bank holding company. At the time, he was chairman of Southgate Alternative Investments, a firm he founded in 2007. Carpenter was CEO of Citigroup’s investment bank until he was reassigned to the alternative investment unit in 2002 amid claims the bank published biased research. He’s quitting the board of CIT Group Inc., the bankrupt commercial lender, the statement said.

De Molina was named GMAC’s chief operating officer in August 2007 and became CEO in April 2008, following a career at Bank of America Corp. and a stint at Cerberus Capital Management. Cerberus, whose chief Stephen Feinberg holds a seat on GMAC’s board, owned a controlling stake in GMAC before the U.S. bailout. The Journal reported Feinberg pushed for de Molina’s ouster.

It would be “categorically incorrect” to suggest that Feinberg forced out de Molina, Carpenter said. Feinberg “was not running the board,” he said.

Losses Mount

GMAC and Minneapolis-based ResCap were already racking up losses on home loans by the time de Molina arrived. ResCap was one of the nation’s biggest suppliers of subprime mortgages, or home loans made to people with the weakest credit.

Defaults have since set records nationwide, topping 25 percent and driving almost all the top subprime lenders out of business. GMAC reported losses in eight of the past nine quarters, driven in part by defaults on home loans. The deficits totaled about $13.2 billion, and ResCap lost $9.2 billion in those eight periods.

‘Losing Gobs of Money’

“You cannot have a company losing gobs of money without getting rid of the people in charge,” said Egan at Egan-Jones Ratings.

Standard & Poor’s Ratings Services said today the switch didn’t change its view of GMAC. “Yesterday’s announcement continues the churning of management at the company, which we already factor into our ratings,” said a statement from S&P, which assigns a CCC/Developing/C” grade for GMAC and ResCap.

A third U.S. infusion would represent the last of the capital needed to close a potential shortfall found by the Federal Reserve’s stress tests of 19 lenders in May.

“A possible solution could be if GMAC chooses to file ResCap,” said Adam Steer, an analyst at CreditSights Inc. in New York, referring to a bankruptcy. “A substantial amount of the losses in the stress test are at the ResCap entity.”

GMAC has said it would continue to support ResCap as long as it was in the interest of its stakeholders. Analysts have been speculating about a bankruptcy for at least a year and GMAC said in November 2008 that ResCap might not survive. In its most recent quarterly filing, GMAC included a discussion of the financial impact from a ResCap bankruptcy.

Carpenter said he hasn’t talked with the board or Kenneth Feinberg, the Obama administration’s special master for executive compensation, about his pay. Feinberg said Carpenter is covered by limits he’s imposed at other lenders.

“He’s CEO, so he’s subject to my jurisdiction for the top 25,” Feinberg told reporters after a speech in New York.

To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

Last Updated: November 17, 2009 10:51 EST