##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549-1004


FORM 10-K


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the fiscal year ended December 31, 2006, or                                             
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the transition period
    from           to          .                                  

Commission file number: 0-51438


RESIDENTIAL CAPITAL, LLC


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 20-1770738                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

8400 Normandale Lake Boulevard


Minneapolis, MN


55437


(Address of principal executive offices)


(Zip Code)


(952) 857-8700


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act




Securities registered pursuant to Section 12(g) of the
Act




þ o


o þ


þ o


S-K 10-K 10-K. þ


12b-2


o o þ


12b-2 o þ






Reduced Disclosure Format


10-K












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##### 










RESIDENTIAL CAPITAL CORPORATION


INDEX


|                                                         |  |                                                                                           |     |      |     | 
|-------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | --- | ---- | --- | 
|                                                         |  |                                                                                           |     | Page |    
|                                                         |  |                                                                                           |     |      |    
|PART I                                                  
|Item 1.                                                  |  | Business                                                                                  |     |      | 2   | 
|Item 1A.                                                 |  | Risk Factors                                                                              |     |      | 34  | 
|Item 1B.                                                 |  | Unresolved Staff Comments                                                                 |     |      | 46  | 
|Item 2.                                                  |  | Properties                                                                                |     |      | 46  | 
|Item 3.                                                  |  | Legal Proceedings                                                                         |     |      | 47  | 
|Item 4.                                                  |  | Submission of Matters to a Vote of Security
    Holders                                   |     |      | 49  | 
|                                                        
|PART II                                                 
|Item 5.                                                  |  | Market for Registrants Common Equity
    and Related Stockholder Matters                 |     |      | 49  | 
|Item 6.                                                  |  | Selected Financial Data                                                                   |     |      | 50  | 
|Item 7.                                                  |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations |     |      | 51  | 
|Item 7A.                                                 |  | Quantitative and Qualitative Disclosures
    About Market Risk                            |     |      | 90  | 
|Item 8.                                                  |  | Financial Statements and Supplementary
    Data                                           |     |      | 96  | 
|                                                         |  | Statement of Responsibility for Preparation
    of Financial Statements                   |     |      | 96  | 
|                                                         |  | Managements Report on Internal
    Control over Financial Reporting                      |     |      | 97  | 
|                                                         |  | Report of Independent Registered Public
    Accounting Firm                               |     |      | 98  | 
|                                                         |  | Consolidated Balance Sheet                                                                |     |      | 100 | 
|                                                         |  | Consolidated Statement of Income                                                          |     |      | 101 | 
|                                                         |  | Consolidated Statement of Changes in
    Equity                                           |     |      | 102 | 
|                                                         |  | Consolidated Statement of Cash Flows                                                      |     |      | 103 | 
|                                                         |  | Notes to Consolidated Financial
    Statements                                            |     |      | 106 | 
|                                                         |  | Supplementary Financial Data                                                              |     |      | 168 | 
|Item 9.                                                  |  | Changes in Disagreements With Accountants
    on Accounting and Financial Disclosure      |     |      | 172 | 
|Item 9A.                                                 |  | Controls and Procedures                                                                   |     |      | 172 | 
|Item 9B.                                                 |  | Other Information                                                                         |     |      | 172 | 
|                                                        
|PART III                                                
|Item 10.                                                 |  | Directors and Executive Officers of the
    Registrant                                    |     |      | 172 | 
|Item 11.                                                 |  | Executive Compensation                                                                    |     |      | 172 | 
|Item 12.                                                 |  | Security Ownership of Certain Beneficial
    Owners and Management                        |     |      | 172 | 
|Item 13.                                                 |  | Certain Relationships and Related
    Transactions                                        |     |      | 172 | 
|Item 14.                                                 |  | Principal Accountant Fees and Services                                                    |     |      | 172 | 
|                                                        
|PART IV                                                 
|Item 15.                                                 |  | Exhibits, Financial Statement Schedules                                                   |     |      | 173 | 
|Signatures                                               |  |                                                                                           | 174 |     
|Exhibit Index                                            |  |                                                                                           | 175 |     
|Computation of Ratio of Earnings to Fixed Charges       
|Consent of Independent Registered Public Accounting Firm
|Certification of Principal Executive Officer            
|Certification of Principal Financial Officer            
|Certification of Principal Executive Officer            





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##### Table of Contents






PART I







|        |          
|------- | ---------
|Item 1. | BUSINESS.

wholly-owned wholly-owned




Business Overview






| |   |                                                                                                                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | U.S. Residential Real Estate Finance  We are
    one of the largest participants in the U.S. residential
    real estate finance industry. We operate this business through
    two segments, GMAC Residential and Residential Capital Group.
    Through these segments, we:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Originate, purchase, sell and securitize residential mortgage
    loans throughout the United States. We are the seventh largest
    producer of residential mortgage loans in the United States (as
    ranked by Inside Mortgage Finance), producing
    approximately $162 billion in residential mortgage loans in
    2006, and the third largest non-agency issuer of mortgage-backed
    and mortgage-related asset-backed securities in the United
    States (as ranked by Inside Mortgage Finance), issuing
    more than $65 billion of these securities in 2006.
|
| |  | Provide primary and master servicing to investors in our
    residential mortgage loans and securitizations. As of
    December 31, 2006, we were the seventh largest servicer of
    residential mortgage loans in the United States (as ranked by
    Inside Mortgage Finance), with a primary servicing
    portfolio of approximately $412 billion.                                                                                                                                                                                                                     
|
| |  | Provide collateralized lines of credit, which we refer to as
    warehouse lending facilities, to other originators of
    residential mortgage loans. As of December 31, 2006, we
    believe we were the largest provider of such facilities in the
    United States.                                                                                                                                                                                                                                                                                                    
|
| |  | Hold a portfolio of residential mortgage loans for investment
    and interests from our securitization activities. This portfolio
    included approximately $71.1 billion in mortgage loans and
    interests from our securitization activities as of
    December 31, 2006.                                                                                                                                                                                                                                                                                             
|
| |  | Conduct banking activities through our affiliate GMAC Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

2



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| |   |                                      
| | - | -------------------------------------
| |  | Provide real estate closing services.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Business Capital  Through our Business Capital
    Group, we provide financing and equity capital to residential
    land developers and homebuilders. We also provide financing to
    resort developers and healthcare-related enterprises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | International  Our International Business
    Group includes substantially all of our operations outside of
    the United States. We originate, purchase, sell and securitize
    residential mortgage loans. We also extend credit to companies
    involved in residential real estate development and provide
    commercial lending facilities. We believe that we are the
    largest originator of nonprime residential mortgage loans in the
    United Kingdom, originating approximately $8 billion of
    such loans in 2006. We produced approximately $28 billion
    in residential mortgage loans outside the United States in 2006
    and we had a servicing portfolio of approximately
    $36 billion of such loans as of December 31, 2006.



857-8700.


www.rescapholdings.com


Our Business




| |                                     
| | ------------------------------------
| | U.S. Residential Real Estate Finance







| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Originating, purchasing, selling and securitizing residential
    mortgage loans;                                                                
|
| |  | Servicing residential mortgage loans for ourselves and others;                                                                                   
|
| |  | Providing warehouse financing to residential mortgage loan
    originators and correspondent lenders to originate residential
    mortgage loans;
|
| |  | Creating a portfolio of mortgage loans and interests that
    continue to be held from our securitization activities;                            
|
| |  | Conducting banking activities through our affiliate GMAC
    Bank; and                                                                           
|
| |  | Providing real estate closing services.                                                                                                          

Loan
Origination and Acquisition




| |                           
| | --------------------------
| | Sources of Loan Production



3



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| |                       
| | ----------------------
| | Direct Lending Network

face-to






| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | GMAC Mortgage, focusing on retail, telephone and internet
    lending services; and
|
| |  | ditech.com®,
    focusing on telephone and internet lending services.              





| |                           
| | --------------------------
| | Mortgage Brokerage Network









| |                                                          
| | ---------------------------------------------------------
| | Correspondent Lender and other Secondary Market Purchases





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Summary of Production Channels




|                                                    |                       |                                          |         |           |           |   |         |         |        |  |           |         |  |        |        |         |           |  |         |         |  |   |        |         | 
|--------------------------------------------------- | --------------------- | ---------------------------------------- | ------- | --------- | --------- | - | ------- | ------- | ------ |  | --------- | ------- |  | ------ | ------ | ------- | --------- |  | ------- | ------- |  | - | ------ | ------- | 
|                                                    |                       | U.S. Mortgage Loan Production by Channel |        
|                                                    |                       |                                          |        
|                                                    |                       | For the Year Ended December 31,          |        
|                                                    |                       |                                          |        
|                                                    |                       | 2006                                     |         |           | 2005      |   |         | 2004    |       
|                                                    |                       |                                          |         |           |           |   |         |         |       
|                                                    |                       |                                          |         | Dollar    |           |   |         |         | Dollar |  |           |         |  | Dollar |       
|                                                    |                       | No. of                                   |         |           | Amount of |   |         | No. of  |        |  | Amount of |         |  | No. of |        |         | Amount of | 
|                                                    |                       | Loans                                    |         |           | Loans     |   |         | Loans   |        |  | Loans     |         |  | Loans  |        |         | Loans     | 
|                                                    |                       |                                          |         |           |           |   |         |         |        |  |           |         |  |        |        |         |           | 
|                                                    |                       | (Dollars in millions)                    |        
|Retail branches                                     |                       |                                          | 103,139 |           |           | $ | 15,036  |         |        |  | 126,527   |         |  | $      | 19,097 |         |           |  | 134,160 |         |  | $ | 18,012 |        
|Direct lending (other than retail branches)         |                       |                                          | 135,731 |           |           |   | 12,547  |         |        |  | 161,746   |         |  |        | 17,228 |         |           |  | 148,343 |         |  |   | 16,209 |        
|Mortgage brokers                                    |                       |                                          | 169,200 |           |           |   | 29,025  |         |        |  | 134,263   |         |  |        | 22,961 |         |           |  | 111,571 |         |  |   | 16,302 |        
|Correspondent lender and secondary market purchases |                       |                                          | 642,169 |           |           |   | 104,960 |         |        |  | 552,624   |         |  |        | 99,776 |         |           |  | 533,459 |         |  |   | 82,504 |        
|                                                    |                       |                                          |         |           |           |   |         |         |        |  |           |         |  |        |        |         |           | 
|                                                    | Total U.S. production |                                          |         | 1,050,239 |           |   | $       | 161,568 |        |  |           | 975,160 |  |        | $      | 159,062 |           |  |         | 927,533 |  |   | $      | 133,027 | 
|                                                    |                       |                                          |         |           |           |   |         |         |        |  |           |         |  |        |        |         |           | 

Types of Mortgage Loans






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Prime Conforming Mortgage Loans  These are prime
    credit quality first-lien mortgage loans secured by
    single-family residences that meet or conform to the
    underwriting standards established by Fannie Mae or Freddie Mac
    for inclusion in their guaranteed mortgage securities programs.                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Prime Non-Conforming Mortgage Loans  These are prime
    credit quality first-lien mortgage loans secured by
    single-family residences that either (1) do not conform to
    the underwriting standards established by Fannie Mae or Freddie
    Mac, because they have original principal amounts exceeding
    Fannie Mae and Freddie Mac limits ($359,650 in 2005, $417,000 in
    2006 and 2007), which are commonly referred to as jumbo mortgage
    loans, or (2) have alternative documentation requirements
    and property or credit-related features (e.g., higher
    loan-to-value or
    debt-to-income ratios)
    but are otherwise considered prime credit quality due to other
    compensating factors.
|
| |  | Government Mortgage Loans  These are first-lien
    mortgage loans secured by single-family residences that are
    insured by the Federal Housing Administration or guaranteed by
    the Veterans Administration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Nonprime Mortgage Loans  These are first-lien and
    certain junior lien mortgage loans secured by single-family
    residences, made to individuals with credit profiles that do not
    qualify for a prime loan, have credit-related features that fall
    outside the parameters of traditional prime mortgage products or
    have performance characteristics that otherwise expose us to
    comparatively higher risk of loss.                                                                                                                                                                                                                                                                                      
|
| |  | Prime Second-Lien Mortgage Loans  These are open- and
    closed-end mortgage loans secured by a second or more junior
    lien on single-family residences, which include home equity
    mortgage loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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|                     |                       |                                       |         |           |           |   |        |         |        |  |           |         |  |        |        |         |           |  |         |         |  |   |        |         | 
|-------------------- | --------------------- | ------------------------------------- | ------- | --------- | --------- | - | ------ | ------- | ------ |  | --------- | ------- |  | ------ | ------ | ------- | --------- |  | ------- | ------- |  | - | ------ | ------- | 
|                     |                       | U.S. Mortgage Loan Production by Type |        
|                     |                       |                                       |        
|                     |                       | For the Year Ended December 31,       |        
|                     |                       |                                       |        
|                     |                       | 2006                                  |         |           | 2005      |   |        | 2004    |       
|                     |                       |                                       |         |           |           |   |        |         |       
|                     |                       |                                       |         | Dollar    |           |   |        |         | Dollar |  |           |         |  | Dollar |       
|                     |                       | No. of                                |         |           | Amount of |   |        | No. of  |        |  | Amount of |         |  | No. of |        |         | Amount of | 
|                     |                       | Loans                                 |         |           | Loans     |   |        | Loans   |        |  | Loans     |         |  | Loans  |        |         | Loans     | 
|                     |                       |                                       |         |           |           |   |        |         |        |  |           |         |  |        |        |         |           | 
|                     |                       | (Dollars in millions)                 |        
|Prime conforming     |                       |                                       | 233,058 |           |           | $ | 43,350 |         |        |  | 275,351   |         |  | $      | 50,047 |         |           |  | 276,129 |         |  | $ | 45,593 |        
|Prime non-conforming |                       |                                       | 193,736 |           |           |   | 60,294 |         |        |  | 192,914   |         |  |        | 55,811 |         |           |  | 163,260 |         |  |   | 43,473 |        
|Government           |                       |                                       | 25,474  |           |           |   | 3,665  |         |        |  | 31,164    |         |  |        | 4,251  |         |           |  | 40,062  |         |  |   | 4,834  |        
|Nonprime             |                       |                                       | 193,880 |           |           |   | 30,555 |         |        |  | 226,317   |         |  |        | 35,874 |         |           |  | 217,344 |         |  |   | 27,880 |        
|Prime second-lien    |                       |                                       | 404,091 |           |           |   | 23,704 |         |        |  | 249,414   |         |  |        | 13,079 |         |           |  | 230,738 |         |  |   | 11,247 |        
|                     |                       |                                       |         |           |           |   |        |         |        |  |           |         |  |        |        |         |           | 
|                     | Total U.S. production |                                       |         | 1,050,239 |           |   | $      | 161,568 |        |  |           | 975,160 |  |        | $      | 159,062 |           |  |         | 927,533 |  |   | $      | 133,027 | 
|                     |                       |                                       |         |           |           |   |        |         |        |  |           |         |  |        |        |         |           | 



|                    |                 |                                 |         |        |      |   |         |        |  |   |         |        | 
|------------------- | --------------- | ------------------------------- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|                    |                 | For the Year Ended December 31, |        
|                    |                 |                                 |        
|                    |                 | 2006                            |         |        | 2005 |   |         | 2004   | 
|                    |                 |                                 |         |        |      |   |         |        | 
|                    |                 | (In millions)                   |        
|Purpose:            |                 |                                 |         |        |      |   |         |        |  |   |         |       
|                    | Purchase        |                                 | $       | 65,889 |      |   | $       | 64,164 |  |   | $       | 49,985 | 
|                    | Non-purchase    |                                 |         | 95,679 |      |   |         | 94,898 |  |   |         | 83,042 | 
|                    |                 |                                 |         |        |      |   |         |        | 
|                    |                 | $                               | 161,568 |        |      | $ | 159,062 |        |  | $ | 133,027 |       
|                    |                 |                                 |         |        |      |   |         |        | 
|Interest rate type: |                 |                                 |         |        |      |   |         |        |  |   |         |       
|                    | Fixed rate      |                                 | $       | 91,695 |      |   | $       | 79,863 |  |   | $       | 72,390 | 
|                    | Adjustable rate |                                 |         | 69,873 |      |   |         | 79,199 |  |   |         | 60,637 | 
|                    |                 |                                 |         |        |      |   |         |        | 
|                    |                 | $                               | 161,568 |        |      | $ | 159,062 |        |  | $ | 133,027 |       
|                    |                 |                                 |         |        |      |   |         |        | 



| |                                           
| | ------------------------------------------
| | Underwriting Standards and Quality Control





| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | the borrowers capacity to repay the loan;                                                                  
|
| |  | the borrowers credit history;                                                                              
|
| |  | the relative size and characteristics of the proposed
    loan; and                                         
|
| |  | the amount of equity in the borrowers property (as
    measured by the borrowers
    loan-to-value ratio).





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Sale
and Securitization Activities














7



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broker-dealer broker-dealer


Servicing
Activities








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|                                    |                                    |                                        |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           |  |           |           |  |   |         |         | 
|----------------------------------- | ---------------------------------- | -------------------------------------- | --------- | --------- | --------- | - | ------- | ------- | ------ |  | --------- | --------- |  | ------ | ------- | ------- | --------- |  | --------- | --------- |  | - | ------- | ------- | 
|                                    |                                    | U.S. Mortgage Loan Servicing Portfolio |          
|                                    |                                    |                                        |          
|                                    |                                    | As of December 31,                     |          
|                                    |                                    |                                        |          
|                                    |                                    | 2006                                   |           |           | 2005      |   |         | 2004    |       
|                                    |                                    |                                        |           |           |           |   |         |         |       
|                                    |                                    |                                        |           | Dollar    |           |   |         |         | Dollar |  |           |           |  | Dollar |        
|                                    |                                    | No. of                                 |           |           | Amount of |   |         | No. of  |        |  | Amount of |           |  | No. of |         |         | Amount of | 
|                                    |                                    | Loans                                  |           |           | Loans     |   |         | Loans   |        |  | Loans     |           |  | Loans  |         |         | Loans     | 
|                                    |                                    |                                        |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 
|                                    |                                    | (Dollars in millions)                  |          
|Prime conforming mortgage loans     |                                    |                                        | 1,456,344 |           |           | $ | 203,927 |         |        |  | 1,393,379 |           |  | $      | 186,405 |         |           |  | 1,323,918 |           |  | $ | 165,577 |        
|Prime non-conforming mortgage loans |                                    |                                        | 319,255   |           |           |   | 101,138 |         |        |  | 257,550   |           |  |        | 76,980  |         |           |  | 203,822   |           |  |   | 55,585  |        
|Government mortgage loans           |                                    |                                        | 181,563   |           |           |   | 18,843  |         |        |  | 181,679   |           |  |        | 18,098  |         |           |  | 191,844   |           |  |   | 18,328  |        
|Nonprime mortgage loans             |                                    |                                        | 409,516   |           |           |   | 55,750  |         |        |  | 493,486   |           |  |        | 56,373  |         |           |  | 505,929   |           |  |   | 51,139  |        
|Prime second-lien mortgage loans    |                                    |                                        | 784,170   |           |           |   | 32,726  |         |        |  | 500,534   |           |  |        | 17,073  |         |           |  | 445,396   |           |  |   | 13,718  |        
|                                    |                                    |                                        |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 
|                                    | Total primary servicing portfolio* |                                        |           | 3,150,848 |           |   | $       | 412,384 |        |  |           | 2,826,628 |  |        | $       | 354,929 |           |  |           | 2,670,909 |  |   | $       | 304,347 | 
|                                    |                                    |                                        |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 






|  |                                                                                                                                                                                                                                                                                                                                                             
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excludes loans for which we acted as a subservicer. Subserviced
    loans totaled 290,992 with an unpaid principal balance of
    $55.4 billion as of December 31, 2006, 271,489 with an
    unpaid principal balance of $38.9 billion as of
    December 31, 2005 and 99,082 with an unpaid principal
    balance of $13.9 billion as of December 31, 2004.

9



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|                                        |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           |  |           |        |  |   |         |       | 
|--------------------------------------- | --------------- | -------------------------------------------------- | --------- | ------ | --------- | - | ------- | ------ | ------ |  | --------- | ------ |  | ------ | ------- | ----- | --------- |  | --------- | ------ |  | - | ------- | ----- | 
|                                        |                 | U.S. Mortgage Loan Servicing Portfolio Delinquency |          
|                                        |                 |                                                    |          
|                                        |                 | For the Year Ended December 31,                    |          
|                                        |                 |                                                    |          
|                                        |                 | 2006                                               |           |        | 2005      |   |         | 2004   |       
|                                        |                 |                                                    |           |        |           |   |         |        |       
|                                        |                 |                                                    |           | Dollar |           |   |         |        | Dollar |  |           |        |  | Dollar |        
|                                        |                 | No. of                                             |           |        | Amount of |   |         | No. of |        |  | Amount of |        |  | No. of |         |       | Amount of | 
|                                        |                 | Loans                                              |           |        | Loans     |   |         | Loans  |        |  | Loans     |        |  | Loans  |         |       | Loans     | 
|                                        |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           | 
|                                        |                 | (Dollars in millions)                              |          
|Total U.S. mortgage loans serviced      |                 |                                                    | 3,150,848 |        |           | $ | 412,384 |        |        |  | 2,826,628 |        |  | $      | 354,929 |       |           |  | 2,670,909 |        |  | $ | 304,347 |      
|                                        |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           | 
|Period of delinquency(1)(2)             |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           |  |           |        |  |   |         |      
|                                        | 30 to 59 days   |                                                    |           | 93,423 |           |   | $       | 12,166 |        |  |           | 80,431 |  |        | $       | 9,559 |           |  |           | 74,344 |  |   | $       | 8,021 | 
|                                        | 60 to 89 days   |                                                    |           | 27,779 |           |   |         | 3,379  |        |  |           | 25,052 |  |        |         | 2,703 |           |  |           | 21,627 |  |   |         | 2,066 | 
|                                        | 90 days or more |                                                    |           | 41,761 |           |   |         | 4,714  |        |  |           | 36,973 |  |        |         | 3,367 |           |  |           | 26,495 |  |   |         | 2,376 | 
|Foreclosures pending                    |                 |                                                    | 36,034    |        |           |   | 4,682   |        |        |  | 31,925    |        |  |        | 3,370   |       |           |  | 37,712    |        |  |   | 3,458   |      
|                                        |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           | 
|Total delinquent loans                  |                 |                                                    | 198,997   |        |           | $ | 24,941  |        |        |  | 174,381   |        |  | $      | 18,999  |       |           |  | 160,178   |        |  | $ | 15,921  |      
|                                        |                 |                                                    |           |        |           |   |         |        |        |  |           |        |  |        |         |       |           | 
|Percent of U.S. mortgage loans serviced |                 |                                                    | 6.32      | %      |           |   | 6.05    | %      |        |  | 6.17      | %      |  |        | 5.35    | %     |           |  | 6.00      | %      |  |   | 5.23    | %    






|    |                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As used in this discussion, prime credit quality loans and some
    of our other mortgage loans are considered to be 30 or more days
    delinquent when a payment due remains unpaid as of the close of
    business on the last business day immediately prior to the next
    following monthly due date.
|   
|(2) | Does not include foreclosures pending.                                                                                                                                                                                                                                                                      



Warehouse
Lending








10



---



##### Table of Contents



Mortgage
Loans Held for Investment and Interests That Continue to Be Held
by The Company










GMAC
Bank




11



---



##### Table of Contents





















Other
Related Real Estate Finance Activities




12



---



##### Table of Contents





Our
U.S. Residential Real Estate Finance Operating Segments






| |                 
| | ----------------
| | GMAC Residential







| |                           
| | --------------------------
| | Sources of Loan Production





|                                            |                                |                                                         |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           |  |         |         |  |   |        |        | 
|------------------------------------------- | ------------------------------ | ------------------------------------------------------- | ------- | ------- | --------- | - | ------ | ------ | ------ |  | --------- | ------- |  | ------ | ------ | ------ | --------- |  | ------- | ------- |  | - | ------ | ------ | 
|                                            |                                | GMAC Residential Mortgage Loan Production by Channel(1) |        
|                                            |                                |                                                         |        
|                                            |                                | For the Year Ended December 31,                         |        
|                                            |                                |                                                         |        
|                                            |                                | 2006                                                    |         |         | 2005      |   |        | 2004   |       
|                                            |                                |                                                         |         |         |           |   |        |        |       
|                                            |                                |                                                         |         | Dollar  |           |   |        |        | Dollar |  |           |         |  | Dollar |       
|                                            |                                | No. of                                                  |         |         | Amount of |   |        | No. of |        |  | Amount of |         |  | No. of |        |        | Amount of | 
|                                            |                                | Loans                                                   |         |         | Loans     |   |        | Loans  |        |  | Loans     |         |  | Loans  |        |        | Loans     | 
|                                            |                                |                                                         |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                                            |                                | (Dollars in millions)                                   |        
|Retail branches                             |                                |                                                         | 103,139 |         |           | $ | 15,036 |        |        |  | 126,527   |         |  | $      | 19,097 |        |           |  | 134,160 |         |  | $ | 18,012 |       
|Direct lending (other than retail branches) |                                |                                                         | 126,560 |         |           |   | 11,285 |        |        |  | 155,224   |         |  |        | 16,189 |        |           |  | 143,316 |         |  |   | 15,302 |       
|Mortgage brokers                            |                                |                                                         | 11,031  |         |           |   | 2,173  |        |        |  | 29,455    |         |  |        | 6,038  |        |           |  | 14,172  |         |  |   | 2,524  |       
|Correspondent lenders                       |                                |                                                         | 309,099 |         |           |   | 48,295 |        |        |  | 259,346   |         |  |        | 50,222 |        |           |  | 289,974 |         |  |   | 51,609 |       
|                                            |                                |                                                         |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                                            | Total mortgage loan production |                                                         |         | 549,829 |           |   | $      | 76,789 |        |  |           | 570,552 |  |        | $      | 91,546 |           |  |         | 581,622 |  |   | $      | 87,447 | 
|                                            |                                |                                                         |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 






|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes $8.2 billion (December 31, 2006),
    $5.8 billion (December 31, 2005) and $4.6 billion
    (December 31, 2004) of loans purchased from Residential
    Capital Group.

13



---



##### Table of Contents





| |                        
| | -----------------------
| | Types of Mortgage Loans



|                     |       |                                                      |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           |  |         |         |  |   |        |        | 
|-------------------- | ----- | ---------------------------------------------------- | ------- | ------- | --------- | - | ------ | ------ | ------ |  | --------- | ------- |  | ------ | ------ | ------ | --------- |  | ------- | ------- |  | - | ------ | ------ | 
|                     |       | GMAC Residential Mortgage Loan Production by Type(1) |        
|                     |       |                                                      |        
|                     |       | For the Year Ended December 31,                      |        
|                     |       |                                                      |        
|                     |       | 2006                                                 |         |         | 2005      |   |        | 2004   |       
|                     |       |                                                      |         |         |           |   |        |        |       
|                     |       |                                                      |         | Dollar  |           |   |        |        | Dollar |  |           |         |  | Dollar |       
|                     |       | No. of                                               |         |         | Amount of |   |        | No. of |        |  | Amount of |         |  | No. of |        |        | Amount of | 
|                     |       | Loans                                                |         |         | Loans     |   |        | Loans  |        |  | Loans     |         |  | Loans  |        |        | Loans     | 
|                     |       |                                                      |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                     |       | (Dollars in millions)                                |        
|Prime conforming     |       |                                                      | 234,508 |         |           | $ | 43,647 |        |        |  | 275,148   |         |  | $      | 50,003 |        |           |  | 276,444 |         |  | $ | 45,635 |       
|Prime non-conforming |       |                                                      | 40,435  |         |           |   | 13,703 |        |        |  | 96,291    |         |  |        | 27,903 |        |           |  | 101,883 |         |  |   | 28,521 |       
|Government           |       |                                                      | 25,474  |         |           |   | 3,665  |        |        |  | 31,164    |         |  |        | 4,251  |        |           |  | 40,062  |         |  |   | 4,834  |       
|Nonprime             |       |                                                      | 3,425   |         |           |   | 468    |        |        |  | 2,292     |         |  |        | 110    |        |           |  | 3,854   |         |  |   | 178    |       
|Prime second-lien    |       |                                                      | 245,987 |         |           |   | 15,306 |        |        |  | 165,657   |         |  |        | 9,279  |        |           |  | 159,379 |         |  |   | 8,279  |       
|                     |       |                                                      |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                     | Total |                                                      |         | 549,829 |           |   | $      | 76,789 |        |  |           | 570,552 |  |        | $      | 91,546 |           |  |         | 581,622 |  |   | $      | 87,447 | 
|                     |       |                                                      |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 






|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes $8.2 billion (December 31, 2006),
    $5.8 billion (December 31, 2005) and $4.6 billion
    (December 31, 2004) of loans purchased from Residential
    Capital Group.



| |                                                     
| | ----------------------------------------------------
| | Automated Underwriting Technology and Bulk Purchases

® ® ® ®




| |                                   
| | ----------------------------------
| | Sale and Securitization Activities





| |                     
| | --------------------
| | Servicing Activities



14



---



##### Table of Contents





|                                    |                                   |                                                    |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           |  |           |           |  |   |         |         | 
|----------------------------------- | --------------------------------- | -------------------------------------------------- | --------- | --------- | --------- | - | ------- | ------- | ------ |  | --------- | --------- |  | ------ | ------- | ------- | --------- |  | --------- | --------- |  | - | ------- | ------- | 
|                                    |                                   | GMAC Residential Mortgage Loan Servicing Portfolio |          
|                                    |                                   |                                                    |          
|                                    |                                   | As of December 31,                                 |          
|                                    |                                   |                                                    |          
|                                    |                                   | 2006                                               |           |           | 2005      |   |         | 2004    |       
|                                    |                                   |                                                    |           |           |           |   |         |         |       
|                                    |                                   |                                                    |           | Dollar    |           |   |         |         | Dollar |  |           |           |  | Dollar |        
|                                    |                                   | No. of                                             |           |           | Amount of |   |         | No. of  |        |  | Amount of |           |  | No. of |         |         | Amount of | 
|                                    |                                   | Loans                                              |           |           | Loans     |   |         | Loans   |        |  | Loans     |           |  | Loans  |         |         | Loans     | 
|                                    |                                   |                                                    |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 
|                                    |                                   | (Dollars in millions)                              |          
|Prime conforming mortgage loans     |                                   |                                                    | 1,455,919 |           |           | $ | 203,894 |         |        |  | 1,392,870 |           |  | $      | 186,365 |         |           |  | 1,323,249 |           |  | $ | 165,521 |        
|Prime non-conforming mortgage loans |                                   |                                                    | 67,462    |           |           |   | 32,220  |         |        |  | 69,488    |           |  |        | 32,384  |         |           |  | 53,119    |           |  |   | 23,604  |        
|Government mortgage loans           |                                   |                                                    | 181,563   |           |           |   | 18,843  |         |        |  | 181,679   |           |  |        | 18,098  |         |           |  | 191,844   |           |  |   | 18,328  |        
|Nonprime mortgage loans             |                                   |                                                    | 8,104     |           |           |   | 275     |         |        |  | 14,018    |           |  |        | 553     |         |           |  | 20,227    |           |  |   | 718     |        
|Prime second-lien mortgage loans    |                                   |                                                    | 505,981   |           |           |   | 20,723  |         |        |  | 378,243   |           |  |        | 12,481  |         |           |  | 330,107   |           |  |   | 9,656   |        
|                                    |                                   |                                                    |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 
|                                    | Total primary servicing portfolio |                                                    |           | 2,219,029 |           |   | $       | 275,955 |        |  |           | 2,036,298 |  |        | $       | 249,881 |           |  |           | 1,918,546 |  |   | $       | 217,827 | 
|                                    |                                   |                                                    |           |           |           |   |         |         |        |  |           |           |  |        |         |         |           | 



| |                  
| | -----------------
| | Warehouse Lending





| |                          
| | -------------------------
| | Residential Capital Group

debt-to loan-to






| |                           
| | --------------------------
| | Sources of Loan Production



15



---



##### Table of Contents





|                                                    |                                     |                                                            |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           |  |         |         |  |   |        |        | 
|--------------------------------------------------- | ----------------------------------- | ---------------------------------------------------------- | ------- | ------- | --------- | - | ------ | ------ | ------ |  | --------- | ------- |  | ------ | ------ | ------ | --------- |  | ------- | ------- |  | - | ------ | ------ | 
|                                                    |                                     | Residential Capital Group U.S. Mortgage Loan Production by |        
|                                                    |                                     | Channel(1)                                                 |        
|                                                    |                                     |                                                            |        
|                                                    |                                     | For the Year Ended December 31,                            |        
|                                                    |                                     |                                                            |        
|                                                    |                                     | 2006                                                       |         |         | 2005      |   |        | 2004   |       
|                                                    |                                     |                                                            |         |         |           |   |        |        |       
|                                                    |                                     |                                                            |         | Dollar  |           |   |        |        | Dollar |  |           |         |  | Dollar |       
|                                                    |                                     | No. of                                                     |         |         | Amount of |   |        | No. of |        |  | Amount of |         |  | No. of |        |        | Amount of | 
|                                                    |                                     | Loans                                                      |         |         | Loans     |   |        | Loans  |        |  | Loans     |         |  | Loans  |        |        | Loans     | 
|                                                    |                                     |                                                            |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                                                    |                                     | (Dollars in millions)                                      |        
|Direct lending                                      |                                     |                                                            | 11,898  |         |           | $ | 1,636  |        |        |  | 6,522     |         |  | $      | 1,039  |        |           |  | 5,027   |         |  | $ | 907    |       
|Mortgage brokers                                    |                                     |                                                            | 158,169 |         |           |   | 26,852 |        |        |  | 104,808   |         |  |        | 16,923 |        |           |  | 97,399  |         |  |   | 13,778 |       
|Correspondent lender and secondary market purchases |                                     |                                                            | 392,229 |         |           |   | 68,989 |        |        |  | 326,902   |         |  |        | 55,327 |        |           |  | 274,941 |         |  |   | 35,517 |       
|                                                    |                                     |                                                            |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                                                    | Total U.S. mortgage loan production |                                                            |         | 562,296 |           |   | $      | 97,477 |        |  |           | 438,232 |  |        | $      | 73,289 |           |  |         | 377,367 |  |   | $      | 50,202 | 
|                                                    |                                     |                                                            |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(1) | Includes $4.5 billion (December 31, 2006) of loans
    purchased from GMAC Residential.



| |                        
| | -----------------------
| | Types of Mortgage Loans





|                     |                                     |                                                                    |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           |  |         |         |  |   |        |        | 
|-------------------- | ----------------------------------- | ------------------------------------------------------------------ | ------- | ------- | --------- | - | ------ | ------ | ------ |  | --------- | ------- |  | ------ | ------ | ------ | --------- |  | ------- | ------- |  | - | ------ | ------ | 
|                     |                                     | Residential Capital Group U.S. Mortgage Loan Production by Type(1) |        
|                     |                                     |                                                                    |        
|                     |                                     | For the Year Ended December 31,                                    |        
|                     |                                     |                                                                    |        
|                     |                                     | 2006                                                               |         |         | 2005      |   |        | 2004   |       
|                     |                                     |                                                                    |         |         |           |   |        |        |       
|                     |                                     |                                                                    |         | Dollar  |           |   |        |        | Dollar |  |           |         |  | Dollar |       
|                     |                                     | No. of                                                             |         |         | Amount of |   |        | No. of |        |  | Amount of |         |  | No. of |        |        | Amount of | 
|                     |                                     | Loans                                                              |         |         | Loans     |   |        | Loans  |        |  | Loans     |         |  | Loans  |        |        | Loans     | 
|                     |                                     |                                                                    |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                     |                                     | (Dollars in millions)                                              |        
|Prime conforming     |                                     |                                                                    | 43,774  |         |           | $ | 7,658  |        |        |  | 32,964    |         |  | $      | 5,413  |        |           |  | 31,141  |         |  | $ | 4,580  |       
|Prime non-conforming |                                     |                                                                    | 161,904 |         |           |   | 50,498 |        |        |  | 97,486    |         |  |        | 28,312 |        |           |  | 61,377  |         |  |   | 14,952 |       
|Nonprime             |                                     |                                                                    | 198,514 |         |           |   | 30,924 |        |        |  | 224,025   |         |  |        | 35,764 |        |           |  | 213,490 |         |  |   | 27,702 |       
|Prime second-lien    |                                     |                                                                    | 158,104 |         |           |   | 8,397  |        |        |  | 83,757    |         |  |        | 3,800  |        |           |  | 71,359  |         |  |   | 2,968  |       
|                     |                                     |                                                                    |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 
|                     | Total U.S. mortgage loan production |                                                                    |         | 562,296 |           |   | $      | 97,477 |        |  |           | 438,232 |  |        | $      | 73,289 |           |  |         | 377,367 |  |   | $      | 50,202 | 
|                     |                                     |                                                                    |         |         |           |   |        |        |        |  |           |         |  |        |        |        |           | 






|    |                                                                                        
|--- | ---------------------------------------------------------------------------------------
|(1) | Includes $4.5 billion (December 31, 2006) of loans
    purchased from GMAC Residential.



| |                                                     
| | ----------------------------------------------------
| | Automated Underwriting Technology and Bulk Purchases

sm




| |                                   
| | ----------------------------------
| | Sale and Securitization Activities



16



---



##### Table of Contents







| |                     
| | --------------------
| | Servicing Activities





|                                    |                                   |                                                                  |         |         |           |   |        |         |        |  |           |         |  |        |        |         |           |  |         |         |  |   |        |        | 
|----------------------------------- | --------------------------------- | ---------------------------------------------------------------- | ------- | ------- | --------- | - | ------ | ------- | ------ |  | --------- | ------- |  | ------ | ------ | ------- | --------- |  | ------- | ------- |  | - | ------ | ------ | 
|                                    |                                   | Residential Capital Group U.S. Mortgage Loan Servicing Portfolio |        
|                                    |                                   |                                                                  |        
|                                    |                                   | As of December 31,                                               |        
|                                    |                                   |                                                                  |        
|                                    |                                   | 2006                                                             |         |         | 2005      |   |        | 2004    |       
|                                    |                                   |                                                                  |         |         |           |   |        |         |       
|                                    |                                   |                                                                  |         | Dollar  |           |   |        |         | Dollar |  |           |         |  | Dollar |       
|                                    |                                   | No. of                                                           |         |         | Amount of |   |        | No. of  |        |  | Amount of |         |  | No. of |        |         | Amount of | 
|                                    |                                   | Loans                                                            |         |         | Loans     |   |        | Loans   |        |  | Loans     |         |  | Loans  |        |         | Loans     | 
|                                    |                                   |                                                                  |         |         |           |   |        |         |        |  |           |         |  |        |        |         |           | 
|                                    |                                   | (Dollars in millions)                                            |        
|Prime conforming mortgage loans     |                                   |                                                                  | 420     |         |           | $ | 32     |         |        |  | 503       |         |  | $      | 40     |         |           |  | 669     |         |  | $ | 56     |       
|Prime non-conforming mortgage loans |                                   |                                                                  | 251,793 |         |           |   | 68,918 |         |        |  | 188,090   |         |  |        | 44,605 |         |           |  | 150,703 |         |  |   | 31,981 |       
|Nonprime mortgage loans             |                                   |                                                                  | 401,412 |         |           |   | 55,476 |         |        |  | 480,886   |         |  |        | 56,165 |         |           |  | 485,702 |         |  |   | 50,421 |       
|Prime second-lien mortgage loans    |                                   |                                                                  | 278,189 |         |           |   | 12,003 |         |        |  | 122,351   |         |  |        | 4,594  |         |           |  | 115,289 |         |  |   | 4,062  |       
|                                    |                                   |                                                                  |         |         |           |   |        |         |        |  |           |         |  |        |        |         |           | 
|                                    | Total primary servicing portfolio |                                                                  |         | 931,814 |           |   | $      | 136,429 |        |  |           | 791,830 |  |        | $      | 105,404 |           |  |         | 752,363 |  |   | $      | 86,520 | 
|                                    |                                   |                                                                  |         |         |           |   |        |         |        |  |           |         |  |        |        |         |           | 



| |                  
| | -----------------
| | Warehouse Lending





| |                                       
| | --------------------------------------
| | Seasoned and Distressed Mortgage Loans



17



---



##### Table of Contents







| |                 
| | ----------------
| | Business Capital









| |                                 
| | --------------------------------
| | Residential Construction Finance







| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | master commitment used to finance multiple projects under one
    facility with all projects cross-collateralized and
    cross-defaulted; or
|
| |  | project specific commitment used to finance single project
    typically in a joint venture.                                                 



18



---



##### Table of Contents









| |                   
| | ------------------
| | Residential Equity









| |                   
| | ------------------
| | Model Home Finance







19



---



##### Table of Contents







| |               
| | --------------
| | Resort Finance







| |               
| | --------------
| | Health Capital











20



---



##### Table of Contents





| |              
| | -------------
| | International





|                                    |  |                                        |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           |  |        |  |  |   |        | 
|----------------------------------- |  | -------------------------------------- | ------- | ------ | --------- | - | ------ | ------ | ------ |  | --------- |  |  | ------ | ------ |  | --------- |  | ------ |  |  | - | ------ | 
|                                    |  | International Mortgage Loan Production |        
|                                    |  |                                        |        
|                                    |  | For the Year Ended December 31,        |        
|                                    |  |                                        |        
|                                    |  | 2006                                   |         |        | 2005      |   |        | 2004   |       
|                                    |  |                                        |         |        |           |   |        |        |       
|                                    |  |                                        |         | Dollar |           |   |        |        | Dollar |  |           |  |  | Dollar |       
|                                    |  | No. of                                 |         |        | Amount of |   |        | No. of |        |  | Amount of |  |  | No. of |        |  | Amount of | 
|                                    |  | Loans                                  |         |        | Loans     |   |        | Loans  |        |  | Loans     |  |  | Loans  |        |  | Loans     | 
|                                    |  |                                        |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 
|                                    |  | (Dollars in millions)                  |        
|United Kingdom                      |  |                                        | 93,215  |        |           | $ | 22,417 |        |        |  | 57,747    |  |  | $      | 12,538 |  |           |  | 58,838 |  |  | $ | 11,571 | 
|Continental Europe                  |  |                                        | 21,849  |        |           |   | 3,926  |        |        |  | 15,618    |  |  |        | 2,833  |  |           |  | 7,915  |  |  |   | 1,718  | 
|Other                               |  |                                        | 11,915  |        |           |   | 1,439  |        |        |  | 12,605    |  |  |        | 1,168  |  |           |  | 9,216  |  |  |   | 724    | 
|                                    |  |                                        |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 
|Total International loan production |  |                                        | 126,979 |        |           | $ | 27,782 |        |        |  | 85,970    |  |  | $      | 16,539 |  |           |  | 75,969 |  |  | $ | 14,013 | 
|                                    |  |                                        |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 



|                                        |  |                                   |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           |  |        |  |  |   |        | 
|--------------------------------------- |  | --------------------------------- | ------- | ------ | --------- | - | ------ | ------ | ------ |  | --------- |  |  | ------ | ------ |  | --------- |  | ------ |  |  | - | ------ | 
|                                        |  | International Servicing Portfolio |        
|                                        |  |                                   |        
|                                        |  | As of December 31,                |        
|                                        |  |                                   |        
|                                        |  | 2006                              |         |        | 2005      |   |        | 2004   |       
|                                        |  |                                   |         |        |           |   |        |        |       
|                                        |  |                                   |         | Dollar |           |   |        |        | Dollar |  |           |  |  | Dollar |       
|                                        |  | No. of                            |         |        | Amount of |   |        | No. of |        |  | Amount of |  |  | No. of |        |  | Amount of | 
|                                        |  | Loans                             |         |        | Loans     |   |        | Loans  |        |  | Loans     |  |  | Loans  |        |  | Loans     | 
|                                        |  |                                   |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 
|                                        |  | (Dollars in millions)             |        
|United Kingdom                          |  |                                   | 108,672 |        |           | $ | 23,817 |        |        |  | 91,574    |  |  | $      | 16,219 |  |           |  | 59,599 |  |  | $ | 14,349 | 
|Continental Europe                      |  |                                   | 49,251  |        |           |   | 9,956  |        |        |  | 33,273    |  |  |        | 5,796  |  |           |  | 17,486 |  |  |   | 4,005  | 
|Other                                   |  |                                   | 17,990  |        |           |   | 2,444  |        |        |  | 13,573    |  |  |        | 1,696  |  |           |  | 21,100 |  |  |   | 1,084  | 
|                                        |  |                                   |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 
|Total International servicing portfolio |  |                                   | 175,913 |        |           | $ | 36,217 |        |        |  | 138,420   |  |  | $      | 23,711 |  |           |  | 98,185 |  |  | $ | 19,438 | 
|                                        |  |                                   |         |        |           |   |        |        |        |  |           |  |  |        |        |  |           | 

United Kingdom


mortgage-backed


Continental Europe




Canada




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Latin America




Australia




U.K. Securities
Broker-Dealer






| |      
| | -----
| | Other





Competition




| |                                     
| | ------------------------------------
| | U.S. Residential Real Estate Finance





| |   |                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------
| |  | Continuing evolution of the secondary mortgage market, resulting
    in a proliferation of mortgage products;

22



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##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Greater regulation imposed on the industry, resulting in
    increased costs and the need for higher levels of specialization;                                                                                                                                                                                                                                                                                                     
|
| |  | Increasing interest rate volatility, compounded by
    homeowners increasing tendency to refinance their
    mortgages as the refinance process has become more efficient and
    cost effective, resulting in large swings in the volume of
    mortgage loans originated from year to year. These swings in
    mortgage origination volume have placed significant operational
    and financial pressures on mortgage lenders;
|
| |  | The ability to manage risk during periods of volatile pricing
    conditions in the secondary mortgage markets and in an
    environment of increasing mortgage delinquencies and decreased
    home appreciation; and                                                                                                                                                                                                             
|
| |  | Increasing consolidation of mortgage industry participants,
    which impacts access to mortgage products and profits within a
    sector comprised of fewer, more sophisticated players.                                                                                                                                                                                                                                          













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| |                 
| | ----------------
| | Business Capital













| |              
| | -------------
| | International



Regulation






| |                                     
| | ------------------------------------
| | U.S. Residential Real Estate Finance





| |   |                                                 
| | - | ------------------------------------------------
| |  | Equal Credit Opportunity Act;                   
|
| |  | Federal Truth-In-Lending Act;                   
|
| |  | Home Ownership and Equity Protection Act;       
|
| |  | Real Estate Settlement Procedures Act, or RESPA;
|
| |  | Fair Credit Reporting Act;                      

24



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| |   |                                                
| | - | -----------------------------------------------
| |  | Fair Debt Collection Practices Act;            
|
| |  | Home Mortgage Disclosure Act;                  
|
| |  | Fair Housing Act;                              
|
| |  | Telephone Consumer Protection Act;             
|
| |  | Gramm-Leach-Bliley Act;                        
|
| |  | Fair and Accurate Credit Transactions Act;     
|
| |  | CAN-SPAM Act;                                  
|
| |  | Flood Disaster Protection Act;                 
|
| |  | National Flood Insurance Reform Act;           
|
| |  | Homeowners Protection Act;                     
|
| |  | National Housing Act;                          
|
| |  | Federal Trade Commission Credit Practice Rules;
|
| |  | USA PATRIOT Act; and                           
|
| |  | Federal securities laws and regulations.       







| |   |                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | impose licensing obligations and financial requirements on us;                                                                                                           
|
| |  | limit the interest rates, finance charges and other fees that we
    may charge or pay;                                                                                  
|
| |  | regulate the use of credit reports and the reporting of credit
    information;                                                                                          
|
| |  | prohibit discrimination;                                                                                                                                                 
|
| |  | impose underwriting requirements;                                                                                                                                        
|
| |  | mandate disclosures and notices to consumers;                                                                                                                            
|
| |  | mandate the collection and reporting of statistical data
    regarding our customers;                                                                                    
|
| |  | regulate our marketing techniques and practices;                                                                                                                         
|
| |  | require us to safeguard non-public information about our
    customers;                                                                                                  
|
| |  | regulate our servicing practices, including the assessment,
    collection, foreclosure, claims handling and investment and
    interest payments on escrow accounts; and
|
| |  | require us to take precautions against money-laundering and
    doing business with suspected terrorists.                                                                





| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | civil and criminal liability;                                             
|
| |  | loss of licenses and approvals;                                           
|
| |  | damage to our reputation in the industry;                                 
|
| |  | inability to sell or securitize our loans, or otherwise raise
    capital;

25



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| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | demands for indemnification or loan repurchases from purchasers
    of our loans;
|
| |  | fines and penalties and litigation, including class action
    lawsuits;         
|
| |  | governmental investigations and enforcement actions; and                         
|
| |  | claims that an allegedly non-compliant loan is rescindable or
    unenforceable. 



Privacy and Security








| |                          
| | -------------------------
| | Fair Credit Reporting Act





| |                             
| | ----------------------------
| | Home Mortgage Disclosure Act





26



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| |                              
| | -----------------------------
| | Predatory Lending Legislation









| |                                              
| | ---------------------------------------------
| | Real Estate Settlement Procedures Act of 1974





| |                                                  
| | -------------------------------------------------
| | Guidance on Nontraditional Mortgage Product Risks



27



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| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Controlling the Assault of Non-Solicited Pornography and
    Marketing Act of 2003





| |                                                         
| | --------------------------------------------------------
| | The Alternative Mortgage Transactions Parity Act of 1982





| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | Telephone Consumer Protection Act and Telemarketing Consumer
    Fraud and Abuse Prevention Act





| |                
| | ---------------
| | USA PATRIOT Act





28



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| |                                 
| | --------------------------------
| | Non-Federally Chartered Entities





| |          
| | ---------
| | GMAC Bank











| |                              
| | -----------------------------
| | Insurance of Deposit Accounts



29



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| |                                 
| | --------------------------------
| | Capital Distribution Regulations





| |                                                     
| | ----------------------------------------------------
| | Community Reinvestment Act and the Fair Lending Laws





| |                   
| | ------------------
| | Privacy Protection





| |               
| | --------------
| | Broker-Dealers





| |                 
| | ----------------
| | Business Capital



30



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| |              
| | -------------
| | International



| |               
| | --------------
| | European Union





| |               
| | --------------
| | United Kingdom







| |   |                                                     
| | - | ----------------------------------------------------
| |  | lending or acting as a lender;                      
|
| |  | administering or servicing regulated mortgage loans;
|
| |  | arranging mortgage credit; and                      
|
| |  | advising on any regulated mortgage contract.        



Mortgages: Conduct of Business
Sourcebook,






31



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| |        
| | -------
| | Germany

Bundesanstalt für
Finanzdienstleistungsaufsicht, or BAFin Bundesbank




| |   |                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our German banking operation is required to have a minimum
    leverage capital ratio equal to 12% of risk-adjusted assets; and                                                              
|
| |  | The directors of our German banking operation must demonstrate
    compliance with specific independence requirements and adequate
    control over the banks business, processes and risks.







| |                
| | ---------------
| | The Netherlands







| |       
| | ------
| | Canada



32



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| |       
| | ------
| | Mexico





| |      
| | -----
| | Spain





| |                                                
| | -----------------------------------------------
| | Our Responsible Lending Policies and Procedures







33



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##### Table of Contents







Employees







Item 1A.     RISK FACTORS.


Risks Related to Our Business




| |                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our business requires substantial capital, and if we are
    unable to maintain adequate financing sources our profitability
    and financial condition will suffer and jeopardize our ability
    to continue operations.







| |                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Rating agencies may downgrade their ratings for us in the
    future, which would adversely affect our ability to raise
    capital in the debt markets at attractive rates and increase the
    interest that we pay on our outstanding publicly traded notes,
    which could have a material adverse effect on our results of
    operations and financial condition.





34



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| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Recent developments in the residential mortgage market,
    especially in the nonprime sector, may continue to adversely
    affect our earnings and financial condition.





| |                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We remain exposed to credit risk associated with the
    assets held in our portfolio of mortgage loans held for sale and
    investment and interests from our securitization activities, and
    higher rates of delinquency and default rates could adversely
    affect our profitability and financial condition.











35



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| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Our earnings may decrease because of increases or
    decreases in interest rates.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Rising interest rates generally reduce our residential mortgage
    loan production as borrowers become less likely to refinance and
    acquiring a new home becomes more expensive. Rising interest
    rates may also reduce demand for our other lending activities,
    including our warehouse lending and business capital activities.
    If demand for our loans decreases, our earnings may decrease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | During periods of rising interest rates, the value and
    profitability of our mortgage loans may be harmed from the date
    of origination (or interest rate lock) or purchase commitment
    until the date we sell or securitize the mortgage loans. In
    addition, the spread between the interest we receive on our
    mortgage loans during this aggregation period and our funding
    costs may be reduced by increases in market interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Rising interest rates will generally reduce the value of
    mortgage loans and our interests that we continue to hold from
    our securitizations in our investment portfolio. For example,
    some of the interests we retain in connection with our
    securitizations are entitled to cash-flows that primarily
    represent the difference between the amount of interest
    collected on the underlying mortgage loans and the amount of
    interest payable to the holders of senior securities in the
    related securitization. In certain of these securitizations, the
    underlying mortgage loans generally have fixed interest rates
    for the first two or three years while the interest rate payable
    to holders of the senior securities is generally based on an
    adjustable London Inter-Bank Offered Rate, or LIBOR. In other
    securitizations, the underlying mortgage loans have variable
    interest rates that are based on indices other than LIBOR while
    the interest rate payable to holders of securities is generally
    based on LIBOR. If LIBOR increases during the time that the
    mortgage loans are fixed, or increases at a faster rate than the
    rate at which the underlying loans adjust, the income and value
    of our interests from these securitizations will be reduced.
    This would reduce the amount of cash we receive over the life of
    the loans in securitizations structured as financings and from
    our interests, and could require us to reduce the carrying value
    of these interests.
|
| |  | Rising interest rates will generally reduce the demand for
    residential real estate related services, including our
    brokerage, relocation and settlement services, which may reduce
    the income we receive from these services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Our hedging strategies may not be successful in mitigating
    our risks associated with changes in interest rates.



36



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| |                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We use estimates and various assumptions in determining
    the fair value of certain of our assets, and in determining our
    allowance for loan losses. If our estimates or assumptions prove
    to be incorrect, we may be required to write down the value of
    these assets or increase our allowance for loan losses, either
    of which could adversely affect our earnings and financial
    condition.





| |                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We remain exposed to credit risk associated with our
    business lending activities, including our warehouse lending
    activities, and declines in the value of the collateral securing
    these loans or negative developments affecting the borrower
    could adversely affect our profitability and financial
    condition.



37



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| |                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our profitability and financial condition could be
    adversely affected if the assumptions underlying our risk-based
    underwriting and pricing models prove to be incorrect.

sm ®




| |                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in existing U.S. government-sponsored mortgage
    programs, or disruptions in the secondary markets in the United
    States or in other countries in which we operate, could
    adversely affect our profitability and financial
    condition.







| |                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We depend on the accuracy and completeness of information
    about our customers and counterparties, and inaccuracies in such
    information could adversely affect our profitability.



38



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| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be required to repurchase mortgage loans or
    indemnify investors if we breach representations and warranties,
    which could harm our profitability.





| |                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------
| | Our business capital activities expose us to additional
    risks that may adversely affect our revenues and
    profitability.







| |   |                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the performance and financial strength of the developer;                                                                                                                                                                                   
|
| |  | development, construction and other costs of the project not
    exceeding original estimates;                                                                                                                                             
|
| |  | the ability of the project to attract creditworthy buyers;                                                                                                                                                                                 
|
| |  | the project being completed on schedule, which is subject to
    many factors, several of which are beyond the control of the
    developer, such as required governmental approvals, weather,
    labor conditions and material shortages;
|
| |  | the continued involvement of key personnel; and                                                                                                                                                                                            
|
| |  | local housing demand and competition, including the strength of
    the local and national economy and fluctuations in interest
    rates.                                                                                                 



39



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| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | General business and economic conditions may significantly
    and adversely affect our revenues, profitability and financial
    condition.







| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | We face intense competition that could harm our market
    share, revenues and profitability.





40



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##### Table of Contents









| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Increasing competition in the acquisition of mortgage
    loans from correspondent lenders in the secondary market and the
    origination of loans through mortgage brokers, and recent
    consolidation in the mortgage loan industry, may harm our
    profitability.







| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our financial results could be materially adversely
    affected if a large number of homeowners to whom we have lent
    money were to suffer uninsured catastrophic damage to their
    property due to a terrorist attack or natural disaster.





| |                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in accounting standards issued by the Financial
    Accounting Standards Board or other standard-setting bodies may
    adversely affect our reported revenues, profitability and
    financial condition.



41



---



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| |                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | An interruption in or breach of our information systems
    may result in lost business, regulatory actions or litigation or
    otherwise harm our reputation.





| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | The success and growth of our business may be adversely
    affected if we do not adapt to and implement technological
    changes.





| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | becomes non-compliant with existing industry standards or is no
    longer supported by vendors;                           
|
| |  | fails to meet or exceed the capabilities of our
    competitors corresponding technologies or technological
    solutions;
|
| |  | becomes increasingly expensive to service, retain and update; or                                                           
|
| |  | becomes subject to third-party claims of copyright or patent
    infringement.                                             





| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | Our business outside the United States exposes us to
    additional risks that may cause our revenues and profitability
    to decline.





| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | multiple foreign regulatory requirements that are subject to
    change;
|
| |  | differing local product preferences and product requirements;           
|
| |  | fluctuations in foreign currency exchange rates and interest
    rates; 

42



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##### Table of Contents





| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | difficulty in establishing, staffing and managing foreign
    operations;
|
| |  | differing legal and regulatory requirements;                             
|
| |  | potentially negative consequences from changes in tax laws; and          
|
| |  | political and economic instability.                                      





| |                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A significant portion of our business is in the State of
    California, and our business may be significantly harmed by a
    slowdown in the economy or the occurrence of a natural disaster
    in California.









| |                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If GMAC was to become the subject of a bankruptcy
    proceeding and we were substantively consolidated with GMAC, our
    assets would become subject to the claims of our creditors and
    the creditors of GMAC.







| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | GMAC controls all fundamental matters affecting us, and
    its interests may differ from ours.



43



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Legal and Regulatory Risks Related to Our Business




| |                                                                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The scope of our residential mortgage loan production and
    servicing operations exposes us to risks of noncompliance with
    an increasing and inconsistent body of complex laws and
    regulations at the federal, state and local levels in the United
    States and in the international markets in which we
    operate.







| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | civil and criminal liability;                                                    
|
| |  | loss of licenses and approvals;                                                  
|
| |  | damage to our reputation in the industry;                                        
|
| |  | inability to sell or securitize our loans, or otherwise raise
    capital;       
|
| |  | demands for indemnification or loan repurchases from purchasers
    of our loans;
|
| |  | fines and penalties and litigation, including class action
    lawsuits;         
|
| |  | governmental investigations and enforcement actions; and                         
|
| |  | claims that an allegedly non-compliant loan is rescindable or
    unenforceable. 





| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | New legislation with respect to so-called predatory
    lending practices could restrict our ability to produce mortgage
    loans, which could harm our revenues and profitability.



44



---



##### Table of Contents







| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be subject to fines or other penalties based upon
    the conduct of independent mortgage brokers through which we
    originate mortgage loans and lenders from which we acquire
    mortgage loans.





| |                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If warehouse lenders and securitization underwriters face
    exposure stemming from legal violations committed by the
    companies to which they provide financing or underwriting
    services, this could increase our borrowing costs and harm the
    market for our whole loans and mortgage-backed
    securities.



45



---



##### Table of Contents





| |                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | Enhanced reporting required by the Home Mortgage
    Disclosure Act may lead to increased litigation, media coverage
    and challenges to our reputation.







| |                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are no longer able to rely on the Alternative Mortgage
    Transactions Parity Act of 1982 to preempt certain state law
    restrictions on prepayment penalties, which could harm our
    revenues and profitability.








Item 1B.     UNRESOLVED STAFF
COMMENTS.







Item 2.     PROPERTIES.




46



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##### Table of Contents





®











Item 3.     LEGAL PROCEEDINGS.




Kessler.


47



---



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Golden.


Santiago.


Murray.


Parthiban. Murray


48



---



##### Table of Contents



Murray Parthiban Murray.







|        |                                                     
|------- | ----------------------------------------------------
|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.






PART II







|        |                                                                           
|------- | --------------------------------------------------------------------------
|Item 5. | MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
    STOCKHOLDER MATTERS.



49



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|        |                         
|------- | ------------------------
|Item 6. | SELECTED FINANCIAL DATA.



|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |          |         |   |   |          |         |  
|---------------------------------------------------------------- | --------------------------------------------------- | -------------------------------- | -------- | ------- | ---- | - | ------- | ------- |  | - | -------- | ------- |  | ---- | -------- | ------- | - | - | -------- | ------- | -
|                                                                 |                                                     | For the Years Ended December 31, |         
|                                                                 |                                                     |                                  |         
|                                                                 |                                                     | 2006                             |          |         | 2005 |   |         | 2004    |  |   | 2003     |         |  | 2002 |         
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 |                                                     | (In millions)                    |         
|Statement of Income Data:                                        |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |          |         |   |   |          |        
|Interest income                                                  |                                                     | $                                | 8,169.0  |         |      | $ | 5,797.1 |         |  | $ | 4,990.9  |         |  | $    | 3,482.7  |         |   | $ | 1,814.0  |        
|Interest expense                                                 |                                                     |                                  | 6,460.2  |         |      |   | 3,872.1 |         |  |   | 2,405.0  |         |  |      | 1,402.7  |         |   |   | 800.9    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 | Net interest income                                 |                                  |          | 1,708.8 |      |   |         | 1,925.0 |  |   |          | 2,585.9 |  |      |          | 2,080.0 |   |   |          | 1,013.1 |  
|Provision for loan losses                                        |                                                     |                                  | 1,334.1  |         |      |   | 651.8   |         |  |   | 842.9    |         |  |      | 453.5    |         |   |   | 231.7    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 | Net interest income after provision for loan losses |                                  |          | 374.7   |      |   |         | 1,273.2 |  |   |          | 1,743.0 |  |      |          | 1,626.5 |   |   |          | 781.4   |  
|Gain on sale of mortgage loans, net                              |                                                     |                                  | 890.2    |         |      |   | 1,036.7 |         |  |   | 696.9    |         |  |      | 1,746.3  |         |   |   | 1,543.0  |        
|Servicing fees                                                   |                                                     |                                  | 1,583.7  |         |      |   | 1,416.3 |         |  |   | 1,294.3  |         |  |      | 1,185.7  |         |   |   | 1,175.5  |        
|Amortization and impairment of servicing rights                  |                                                     |                                  |         |         |      |   | (762.0  | )       |  |   | (1,003.3 | )       |  |      | (2,014.9 | )       |   |   | (2,217.6 | )      
|Servicing asset valuation and hedge activities, net              |                                                     |                                  | (1,100.2 | )       |      |   | 17.2    |         |  |   | 214.9    |         |  |      | 507.2    |         |   |   | 685.0    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 | Net servicing fees (loss)                           |                                  |          | 483.5   |      |   |         | 671.5   |  |   |          | 505.9   |  |      |          | (322.0  | ) |   |          | (357.1  | )
|Gain (loss) on investment securities, net                        |                                                     |                                  | 68.7     |         |      |   | 236.4   |         |  |   | 63.7     |         |  |      | (222.8   | )       |   |   | (371.5   | )      
|Real estate related revenues                                     |                                                     |                                  | 593.0    |         |      |   | 708.0   |         |  |   | 621.9    |         |  |      | 487.8    |         |   |   | 449.7    |        
|Gain on sale of equity investments                               |                                                     |                                  | 414.5    |         |      |   | 4.2     |         |  |   | 27.3     |         |  |      | 12.6     |         |   |   | 9.5      |        
|Other income                                                     |                                                     |                                  | 197.9    |         |      |   | 305.3   |         |  |   | 308.0    |         |  |      | 398.1    |         |   |   | 447.7    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 | Total net revenue                                   |                                  |          | 3,022.5 |      |   |         | 4,235.3 |  |   |          | 3,966.7 |  |      |          | 3,726.5 |   |   |          | 2,502.7 |  
|Compensation and benefits                                        |                                                     |                                  | 1,206.3  |         |      |   | 1,406.9 |         |  |   | 1,216.5  |         |  |      | 1,188.8  |         |   |   | 962.5    |        
|Professional fees                                                |                                                     |                                  | 273.1    |         |      |   | 212.4   |         |  |   | 224.7    |         |  |      | 169.4    |         |   |   | 115.2    |        
|Data processing and telecommunications                           |                                                     |                                  | 189.1    |         |      |   | 199.9   |         |  |   | 191.1    |         |  |      | 189.3    |         |   |   | 199.8    |        
|Advertising                                                      |                                                     |                                  | 152.8    |         |      |   | 158.7   |         |  |   | 151.4    |         |  |      | 127.7    |         |   |   | 123.6    |        
|Occupancy                                                        |                                                     |                                  | 137.7    |         |      |   | 121.3   |         |  |   | 107.6    |         |  |      | 99.6     |         |   |   | 97.3     |        
|Other                                                            |                                                     |                                  | 637.9    |         |      |   | 509.2   |         |  |   | 465.1    |         |  |      | 585.8    |         |   |   | 496.3    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|                                                                 | Total expenses                                      |                                  |          | 2,596.9 |      |   |         | 2,608.4 |  |   |          | 2,356.4 |  |      |          | 2,360.6 |   |   |          | 1,994.7 |  
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|Income before income tax expense (benefit) and minority interest |                                                     |                                  | 425.6    |         |      |   | 1,626.9 |         |  |   | 1,610.3  |         |  |      | 1,365.9  |         |   |   | 508.0    |        
|Income tax expense (benefit)                                     |                                                     |                                  | (289.2   | )       |      |   | 606.3   |         |  |   | 642.1    |         |  |      | 509.1    |         |   |   | 199.4    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|Income before minority interest                                  |                                                     |                                  | 714.8    |         |      |   | 1,020.6 |         |  |   | 968.2    |         |  |      | 856.8    |         |   |   | 308.6    |        
|Minority interest                                                |                                                     |                                  | 9.7      |         |      |   |        |         |  |   |         |         |  |      |         |         |   |   |         |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         
|Net income                                                       |                                                     | $                                | 705.1    |         |      | $ | 1,020.6 |         |  | $ | 968.2    |         |  | $    | 856.8    |         |   | $ | 308.6    |        
|                                                                 |                                                     |                                  |          |         |      |   |         |         |  |   |          |         |  |      |         

|                                                   |  |                    |           |  |      |   |           |      |  |   |          |  |  |      |          |  |  |   |          | 
|-------------------------------------------------- |  | ------------------ | --------- |  | ---- | - | --------- | ---- |  | - | -------- |  |  | ---- | -------- |  |  | - | -------- | 
|                                                   |  | As of December 31, |          
|                                                   |  |                    |          
|                                                   |  | 2006               |           |  | 2005 |   |           | 2004 |  |   | 2003     |  |  | 2002 |         
|                                                   |  |                    |           |  |      |   |           |      |  |   |          |  |  |      |         
|                                                   |  | (In millions)      |          
|Balance Sheet Data:                                |  |                    |           |  |      |   |           |      |  |   |          |  |  |      |          |  |  |   |          | 
|Total assets                                       |  | $                  | 135,586.8 |  |      | $ | 118,885.1 |      |  | $ | 94,349.5 |  |  | $    | 78,559.6 |  |  | $ | 45,549.1 | 
|Affiliate borrowings                               |  |                    |          |  |      |   | 5,177.5   |      |  |   | 10,006.2 |  |  |      | 10,683.9 |  |  |   | 11,852.6 | 
|Collateralized borrowings in securitization trusts |  |                    | 53,299.5  |  |      |   | 56,097.8  |      |  |   | 50,708.5 |  |  |      | 39,415.6 |  |  |   | 12,422.8 | 
|Other borrowings                                   |  |                    | 59,880.4  |  |      |   | 42,300.5  |      |  |   | 23,703.7 |  |  |      | 20,647.6 |  |  |   | 15,038.3 | 
|Total borrowings                                   |  |                    | 113,179.9 |  |      |   | 103,575.8 |      |  |   | 84,418.4 |  |  |      | 70,747.1 |  |  |   | 39,313.7 | 
|Total equity                                       |  |                    | 7,622.1   |  |      |   | 7,464.0   |      |  |   | 4,365.7  |  |  |      | 3,186.0  |  |  |   | 2,374.3  | 

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|        |                                                                                           
|------- | ------------------------------------------------------------------------------------------
|Item 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS.



General










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | GMAC Residential. Our GMAC Residential segment primarily
    originates, purchases, sells, securitizes and services
    residential mortgage loans. This segment originates residential
    mortgage loans through a retail branch network, direct lending
    centers and mortgage brokers, and also purchases residential
    mortgage loans from correspondent lenders. Most of the loans
    originated or purchased by this segment are prime credit quality
    loans that meet the underwriting standards of Fannie Mae or
    Freddie Mac. This segment also provides collateralized lines of
    credit to other originators of residential mortgage loans, which
    we refer to as warehouse lending. Our limited banking activities
    through GMAC Bank are included in this segment. This segment
    generated approximately 39% of our revenues and 19% of our net
    income in 2006.
|
| |  | Residential Capital Group. Our Residential Capital Group
    originates, purchases, sells, securitizes and services
    residential mortgage loans. This segment originates residential
    mortgage loans primarily through mortgage brokers, purchases
    loans from correspondent lenders and other third parties and
    provides warehouse lending. The residential mortgage loans
    produced by this segment cover a broad credit spectrum and
    generally do not conform to the underwriting requirements of
    Fannie Mae or Freddie Mac. These loans are primarily securitized
    through the issuance of non-agency mortgage-backed and mortgage
    related asset-backed securities. This segment generated
    approximately 7% of our revenues and recorded a net loss in 2006.                                                                                                    
|
| |  | Business Capital Group. Our Business Capital Group
    provides financing and equity capital to residential land
    developers and homebuilders and financing to resort developers
    and healthcare-related enterprises. This segment generated
    approximately 24% of our revenues and 57% of our net income in
    2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | International Business Group. Our International Business
    Group includes substantially all of our operations outside of
    the United States. This segment generated approximately 15% of
    our revenues and 24% of our net income in 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



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Overview














Understanding our Financial Results




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| |                                          
| | -----------------------------------------
| | On- and Off-Balance Sheet Securitizations









| |                    
| | -------------------
| | Net Interest Income



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| |                   
| | ------------------
| | Net Servicing Fees

Accounting for Servicing
of Financial Assets




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Servicing fees  the income earned for
    servicing a loan. This includes the contractual servicing fee as
    well as ancillary servicing items such as late fees. Servicing
    fees are generally calculated as a percentage of the loan
    balance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Amortization and impairment of servicing
    rights  an expense item that amortizes the
    capitalized mortgage servicing right over the estimated life of
    the servicing cash flows expected to be received from servicing
    the mortgage loan. Impairment relates to charges taken for
    temporary impairment of the mortgage servicing rights. The
    adoption of SFAS No. 156 eliminated the amortization and
    impairment of servicing rights.                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Servicing asset valuation and hedge
    activities  changes in valuation inputs or
    assumptions used in the valuation models include all changes due
    to a revaluation by a model or by a benchmarking exercise. This
    line item also includes changes in fair value due to a change in
    valuation assumptions and/or model calculations. Other changes
    in fair value primarily include the accretion of the present
    value of the discount related to forecasted cash flows and the
    economic run-off of the portfolio. In addition this line
    includes the income statement effect of financial instruments
    hedging the mortgage servicing rights for both economic and
    accounting hedges as well as any related fair value adjustment
    of the mortgage servicing rights resulting from the application
    of hedge accounting.



Critical Accounting Estimates








| |                                               
| | ----------------------------------------------
| | Determination of the Allowance for Loan Losses



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| |                                       
| | --------------------------------------
| | Valuation of Mortgage Servicing Rights









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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Prepayments  The most significant driver of
    mortgage servicing rights value is actual and anticipated
    portfolio prepayment behavior. Prepayment speeds represent the
    rate at which borrowers repay their mortgage loans prior to
    scheduled maturity. As interest rates rise, prepayment speeds
    generally slow, and as interest rates decline, prepayment speeds
    generally accelerate. When mortgage loans are paid or expected
    to be paid earlier than originally estimated, the expected
    future cash flows associated with servicing such loans are
    reduced. We primarily use third-party models to project
    residential mortgage loan payoffs. In other cases, we estimate
    prepayment speeds based on historical and expected future
    prepayment rates. We measure model performance by comparing
    prepayment predictions against actual results at both the
    portfolio and product level.
|
| |  | Discount rate  The mortgage servicing rights
    cash flows are discounted at prevailing market rates which
    include an appropriate risk-adjusted spread.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Base mortgage rate  The base mortgage rate
    represents the current market interest rate for newly originated
    mortgage loans. This rate is a key component in estimating
    prepayment speeds of our portfolio because the difference
    between the current base mortgage rate and the interest rates on
    existing loans in our portfolio is an indication of the
    borrowers likelihood to refinance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Cost to Service  In general, servicing cost
    assumptions are based on actual expenses directly related to
    servicing. These servicing cost assumptions are compared to
    market servicing costs when market information is available. Our
    servicing cost assumptions include expenses associated with our
    activities related to loans in default.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Volatility  Volatility represents the expected
    rate of change of interest rates. The volatility assumption used
    in our valuation methodology is intended to place a band around
    the potential interest rate movements from one period to the
    next. We use implied volatility assumptions in connection with
    the valuation of our mortgage servicing rights. Implied
    volatility is defined as the expected rate of change in interest
    rates derived from the prices at which options on interest rate
    swaps, or swaptions, are trading. We update our volatility
    assumptions for the change in implied swaption volatility during
    the period, adjusted by the ratio of historical mortgage to
    swaption volatility.                                                                                                                                                                                   

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Review and compare recent bulk mortgage servicing right
    acquisition activity. We evaluate market trades for
    reliability and relevancy and then consider, as appropriate, our
    estimate of fair value of each significant deal to the traded
    price. Currently, there is a lack of comparable transactions
    between willing buyers and sellers in the bulk acquisition
    market, which are the best indicators of fair value. However, we
    continue to monitor and track market activity on an ongoing
    basis.
|
| |  | Review and compare recent flow servicing trades. We
    evaluate market trades of flow transactions to compare prices on
    our mortgage servicing rights. Fair values of flow market
    transactions may differ from our fair value estimate for several
    reasons, including age/credit seasoning of product, perceived
    profit margin/discount assumed by aggregators, economy of scale
    benefits and cross-sell benefits.                                                                                               
|
| |  | Review and compare fair value price/multiples. We
    evaluate and compare our fair value price/multiples to market
    fair value price/multiples quoted in external surveys produced
    by third parties.                                                                                                                                                                                                                                                                                                                          
|
| |  | Reconcile actual monthly cash flows to projections. We
    reconcile actual monthly cash flows to those projected in the
    mortgage servicing rights valuation. Based upon the results of
    this reconciliation, we assess the need to modify the individual
    assumptions used in the valuation. This process ensures the
    model is calibrated to actual servicing cash flow results.                                                                                                                                       







| |                                             
| | --------------------------------------------
| | Valuation of Interests in Securitized Assets





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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Prepayments  Similar to mortgage servicing
    rights, estimated prepayment speeds significantly impact the
    valuation of our interests that continue to be held by the
    Company in securitized assets because changes in actual and
    expected prepayment speed may significantly change the expected
    cash flows from these securities. For certain securities, we are
    able to obtain market information from third parties to estimate
    prepayment speeds. In other cases, we estimate prepayment speeds
    based upon historical and expected future prepayment rates.                                                                                                                                                                                                                                                                                                                                      
|
| |  | Credit Losses  Expected credit losses on loans
    underlying mortgage-backed and mortgage-related asset-backed
    securities also significantly impact the estimated fair value of
    the related subordinate interests we retain. Credit losses can
    be impacted by many economic variables including unemployment,
    housing prices and other regional factors. The types of loan
    product and the interest rate environment are also key variables
    impacting our credit loss assumptions. For certain securities,
    market information for similar investments is available to
    estimate credit losses and collateral defaults (for example,
    dealer-quoted credit spreads). For other securities, we estimate
    future credit losses using internally-developed credit loss
    models, which generate indicative credit losses on the basis of
    our historical credit loss frequency and severity.
|
| |  | Discount Rate  Discount rate assumptions are
    affected primarily by changes in the assessed risk on the sold
    assets or similar assets and market interest rate movements. We
    determine discount rate assumptions using data obtained from
    market participants, where available, or based on current
    relevant treasury rates, plus an appropriate risk-adjusted
    spread, based on analysis of historical spreads on similar types
    of securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Interest Rates  Estimates of interest rates on
    variable- and adjustable-rate loans are based on spreads over an
    appropriate benchmark interest rate, usually LIBOR, using
    market-based yield curves. The movement in interest rates can
    also have a significant impact on the valuation of our interests
    from securitizations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





Results of Operations




| |                     
| | --------------------
| | Consolidated Results



| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2006 Compared to Year Ended
    December 31, 2005



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Interest rates have steadily increased since the middle of 2005.
    Rising rates have the impact of decreasing mortgage
    affordability. In addition, long-term rates have remained low
    relative to short-term rates (i.e., a flattening of the yield
    curve) and, in some instances, have been lower than short-term
    rates (i.e., an inverted yield curve). This results in a
    reduction in our net interest margin and generally has a
    negative effect on our hedging results.                                                         
|
| |  | The level of home price appreciation declined to a five-year low
    in the fourth quarter of 2006 and, in some areas, home values
    declined, which increased the actual and estimated losses
    related to our loans. A reduction in home sales and an increase
    in the inventory of homes for sale are also increasing the
    estimated number of loans that we expect to ultimately foreclose
    upon and estimated incurred losses. The domestic housing market
    slowdown has also negatively impacted our real estate related
    activities.
|
| |  | The nonprime securitization market significantly deteriorated
    during the fourth quarter of 2006. Pricing for nonprime loans in
    the secondary market declined significantly due to the changing
    market conditions and our ability to securitize delinquent
    nonprime loans was severely restricted. This had a significant
    negative impact on nonprime sales margins and impacted the fair
    value of our delinquent loans in our mortgage loans held for
    sale portfolio.                                                             
|
| |  | In the fourth quarter of 2006, nonprime delinquencies rose
    significantly. The combination of lower home prices and loan
    defaults has put significant pressure on a number of nonprime
    lenders, including our nonprime warehouse lending customers.
    This resulted in a significant provision for loan losses due to
    the decline in value of the collateral for our warehouse lending
    receivables.                                                                                                                                      









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| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004











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30-year








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Segment Results




| |                 
| | ----------------
| | GMAC Residential



|                                                    |  |                         |         |   |      |   |        |      |  |   |        |  
|--------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                    |  | Year Ended December 31, |        
|                                                    |  |                         |        
|                                                    |  | 2006                    |         |   | 2005 |   |        | 2004 | 
|                                                    |  |                         |         |   |      |   |        |      | 
|                                                    |  | (In millions)           |        
|Net interest income                                 |  | $                       | 222.4   |   |      | $ | 289.8  |      |  | $ | 327.6  |  
|Provision for loan losses                           |  |                         | (18.4   | ) |      |   | (3.0   | )    |  |   | 2.8    |  
|Gain on sales of mortgage loans, net                |  |                         | 414.0   |   |      |   | 447.8  |      |  |   | 497.7  |  
|Servicing fees                                      |  |                         | 1,045.1 |   |      |   | 966.8  |      |  |   | 867.3  |  
|Amortization and impairment of servicing rights     |  |                         |        |   |      |   | (539.4 | )    |  |   | (775.6 | )
|Servicing asset valuation and hedge activities, net |  |                         | (718.1  | ) |      |   | 93.6   |      |  |   | 211.2  |  
|                                                    |  |                         |         |   |      |   |        |      | 
|Net servicing fees                                  |  |                         | 327.0   |   |      |   | 521.0  |      |  |   | 302.9  |  
|Other income                                        |  |                         | 246.7   |   |      |   | 230.7  |      |  |   | 142.1  |  
|Operating expenses                                  |  |                         | (937.5  | ) |      |   | (954.3 | )    |  |   | (767.5 | )
|Income tax expense                                  |  |                         | (121.5  | ) |      |   | (224.6 | )    |  |   | (225.0 | )
|                                                    |  |                         |         |   |      |   |        |      | 
|Net income                                          |  | $                       | 132.7   |   |      | $ | 307.4  |      |  | $ | 280.6  |  
|                                                    |  |                         |         |   |      |   |        |      | 

Year ended
December 31, 2006 Compared to Year Ended December 31,
2005
















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| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004











30-year 30-year






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| |                          
| | -------------------------
| | Residential Capital Group



|                                                    |  |                         |          |   |      |   |         |      |  |   |         |  
|--------------------------------------------------- |  | ----------------------- | -------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                    |  | Year Ended December 31, |         
|                                                    |  |                         |         
|                                                    |  | 2006                    |          |   | 2005 |   |         | 2004 | 
|                                                    |  |                         |          |   |      |   |         |      | 
|                                                    |  | (In millions)           |         
|Net interest income                                 |  | $                       | 1,195.0  |   |      | $ | 1,336.2 |      |  | $ | 2,050.2 |  
|Provision for loan losses                           |  |                         | (1,254.5 | ) |      |   | (621.3  | )    |  |   | (820.0  | )
|Gain on sales of mortgage loans, net                |  |                         | 256.1    |   |      |   | 312.6   |      |  |   | 6.7     |  
|Servicing fees                                      |  |                         | 516.0    |   |      |   | 444.9   |      |  |   | 412.5   |  
|Amortization and impairment of servicing rights     |  |                         |         |   |      |   | (221.3  | )    |  |   | (233.5  | )
|Servicing asset valuation and hedge activities, net |  |                         | (380.3   | ) |      |   | (76.4   | )    |  |   | 3.7     |  
|                                                    |  |                         |          |   |      |   |         |      | 
|Net servicing fees                                  |  |                         | 135.7    |   |      |   | 147.2   |      |  |   | 182.7   |  
|Other income (expense)                              |  |                         | (117.7   | ) |      |   | 281.6   |      |  |   | 216.7   |  
|Operating expenses                                  |  |                         | (942.8   | ) |      |   | (822.6  | )    |  |   | (844.6  | )
|Income tax (expense) benefit                        |  |                         | 278.2    |   |      |   | (238.1  | )    |  |   | (302.8  | )
|                                                    |  |                         |          |   |      |   |         |      | 
|Net income (loss)                                   |  | $                       | (450.0   | ) |      | $ | 395.6   |      |  | $ | 488.9   |  
|                                                    |  |                         |          |   |      |   |         |      | 



| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2006 Compared to Year Ended
    December 31, 2005









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| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004









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| |                       
| | ----------------------
| | Business Capital Group



|                          |  |                         |        |   |      |   |        |      |  |   |       |  
|------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ----- | -
|                          |  | Year Ended December 31, |       
|                          |  |                         |       
|                          |  | 2006                    |        |   | 2005 |   |        | 2004 | 
|                          |  |                         |        |   |      |   |        |      | 
|                          |  | (In millions)           |       
|Net interest income       |  | $                       | 88.8   |   |      | $ | 147.9  |      |  | $ | 124.2 |  
|Provision for loan losses |  |                         | (28.4  | ) |      |   | (25.9  | )    |  |   | (21.0 | )
|Other income              |  |                         | 655.8  |   |      |   | 280.6  |      |  |   | 208.8 |  
|Operating expenses        |  |                         | (71.1  | ) |      |   | (81.2  | )    |  |   | (71.8 | )
|Income tax expense        |  |                         | (246.4 | ) |      |   | (120.8 | )    |  |   | (91.9 | )
|                          |  |                         |        |   |      |   |        |      | 
|Net income                |  | $                       | 398.7  |   |      | $ | 200.6  |      |  | $ | 148.3 |  
|                          |  |                         |        |   |      |   |        |      | 

Year ended
December 31, 2006 Compared to Year Ended December 31,
2005






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| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004











69



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| |                             
| | ----------------------------
| | International Business Group



|                                                    |  |                         |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                    |  | Year Ended December 31, |       
|                                                    |  |                         |       
|                                                    |  | 2006                    |        |   | 2005 |   |        | 2004 | 
|                                                    |  |                         |        |   |      |   |        |      | 
|                                                    |  | (In millions)           |       
|Net interest income                                 |  | $                       | 172.2  |   |      | $ | 152.2  |      |  | $ | 105.5  |  
|Provision for loan losses                           |  |                         | (32.4  | ) |      |   | (1.7   | )    |  |   | (4.5   | )
|Gain on sales of mortgage loans, net                |  |                         | 240.1  |   |      |   | 210.8  |      |  |   | 196.8  |  
|Servicing fees                                      |  |                         | 7.6    |   |      |   | (3.5   | )    |  |   | 8.6    |  
|Amortization and impairment of servicing rights     |  |                         |       |   |      |   | (0.3   | )    |  |   | 0.5    |  
|Servicing asset valuation and hedge activities, net |  |                         | (1.9   | ) |      |   |       |      |  |   |       |  
|                                                    |  |                         |        |   |      |   |        |      | 
|Net servicing fees (loss)                           |  |                         | 5.7    |   |      |   | (3.8   | )    |  |   | 9.1    |  
|Other income                                        |  |                         | 77.0   |   |      |   | 25.1   |      |  |   | (29.0  | )
|Operating expenses                                  |  |                         | (246.0 | ) |      |   | (253.3 | )    |  |   | (200.5 | )
|Income tax expense                                  |  |                         | (46.6  | ) |      |   | (39.2  | )    |  |   | (26.1  | )
|                                                    |  |                         |        |   |      |   |        |      | 
|Net income                                          |  | $                       | 170.0  |   |      | $ | 90.1   |      |  | $ | 51.3   |  
|                                                    |  |                         |        |   |      |   |        |      | 

Year ended
December 31, 2006 Compared to Year Ended December 31,
2005














| |                                                                          
| | -------------------------------------------------------------------------
| | Year Ended December 31, 2005 Compared to Year Ended
    December 31, 2004





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| |                    
| | -------------------
| | Corporate and Other



|                                                      |  |                         |        |   |      |   |        |      |  |   |        |  
|----------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                      |  | Year Ended December 31, |       
|                                                      |  |                         |       
|                                                      |  | 2006                    |        |   | 2005 |   |        | 2004 | 
|                                                      |  |                         |        |   |      |   |        |      | 
|                                                      |  | (In millions)           |       
|Net interest income (expense)                         |  | $                       | 30.4   |   |      | $ | (1.1   | )    |  | $ | (21.6  | )
|Provision for loan losses                             |  |                         | (0.4   | ) |      |   |       |      |  |   | (0.2   | )
|Gain (loss) on sales of loans                         |  |                         | (3.0   | ) |      |   | 64.6   |      |  |   | (5.9   | )
|Servicing fees                                        |  |                         | 16.7   |   |      |   | 10.2   |      |  |   | 7.6    |  
|Mortgage servicing rights amortization and impairment |  |                         |       |   |      |   | (0.9   | )    |  |   | 5.3    |  
|                                                      |  |                         |        |   |      |   |        |      | 
|Net servicing fees                                    |  |                         | 16.7   |   |      |   | 9.3    |      |  |   | 12.9   |  
|Other income                                          |  |                         | 414.6  |   |      |   | 435.8  |      |  |   | 482.3  |  
|Operating expenses                                    |  |                         | (408.0 | ) |      |   | (496.9 | )    |  |   | (472.0 | )
|Income tax benefit                                    |  |                         | 426.0  |   |      |   | 16.0   |      |  |   | 3.6    |  
|Minority interest                                     |  |                         | (9.7   | ) |      |   |       |      |  |   |       |  
|                                                      |  |                         |        |   |      |   |        |      | 
|Net income (loss)                                     |  | $                       | 466.6  |   |      |   | 27.7   |      |  | $ | (0.9   | )
|                                                      |  |                         |        |   |      |   |        |      | 





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Asset Quality




| |                          
| | -------------------------
| | Allowance for Loan Losses





two-to




72



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|                                                |  |                |         |   |             |   |       |       |  |   |       |   |  |   |         |  
|----------------------------------------------- |  | -------------- | ------- | - | ----------- | - | ----- | ----- |  | - | ----- | - |  | - | ------- | -
|                                                |  | Mortgage Loans |         |   |             |   |       |       | 
|                                                |  | Held for       |         |   | Lending     |   |       |       |  |  
|                                                |  | Investment     |         |   | Receivables |   |       | Other |  |   | Total |  
|                                                |  |                |         |   |             |   |       |       |  |   |       |  
|                                                |  | (In millions)  |         |   |            
|Balance at January 1, 2004                      |  | $              | 491.0   |   |             | $ | 127.0 |       |  | $ |      |   |  | $ | 618.0   |  
|Provision for loan losses                       |  |                | 811.7   |   |             |   | 31.2  |       |  |   |      |   |  |   | 842.9   |  
|Charge-offs                                     |  |                | (440.4  | ) |             |   | (20.2 | )     |  |   |      |   |  |   | (460.6  | )
|Recoveries                                      |  |                | 10.6    |   |             |   | 3.8   |       |  |   |      |   |  |   | 14.4    |  
|                                                |  |                |         |   |             |   |       |       |  |   |       |  
|Balance at December 31, 2004                    |  |                | 872.9   |   |             |   | 141.8 |       |  |   |      |   |  |   | 1,014.7 |  
|Provision for loan losses                       |  |                | 599.8   |   |             |   | 52.0  |       |  |   |      |   |  |   | 651.8   |  
|Charge-offs                                     |  |                | (443.8  | ) |             |   | (6.8  | )     |  |   |      |   |  |   | (450.6  | )
|Recoveries                                      |  |                | 37.0    |   |             |   | 0.4   |       |  |   |      |   |  |   | 37.4    |  
|                                                |  |                |         |   |             |   |       |       |  |   |       |  
|Balance at December 31, 2005                    |  |                | 1,065.9 |   |             |   | 187.4 |       |  |   |      |   |  |   | 1,253.3 |  
|Consolidation of IB Finance Holding Company LLC |  |                |        |   |             |   |      |       |  |   | 25.7  |   |  |   | 25.7    |  
|Provision for loan losses                       |  |                | 1,116.4 |   |             |   | 217.3 |       |  |   | 0.4   |   |  |   | 1,334.1 |  
|Charge-offs                                     |  |                | (720.8  | ) |             |   | (9.3  | )     |  |   | (0.4  | ) |  |   | (730.5  | )
|Recoveries                                      |  |                | 46.9    |   |             |   | 1.2   |       |  |   | 0.1   |   |  |   | 48.2    |  
|                                                |  |                |         |   |             |   |       |       |  |   |       |  
|Balance at December 31, 2006                    |  | $              | 1,508.4 |   |             | $ | 396.6 |       |  | $ | 25.8  |   |  | $ | 1,930.8 |  
|                                                |  |                |         |   |             |   |       |       |  |   |       |  
|Allowance as a percentage of total:             |  |                |         |   |             |   |       |       |  |   |       |   |  |   |         |  
|December 31, 2004                               |  |                | 1.51    | % |             |   | 1.49  | %     |  |   |      | % |  |   | 1.51    | %
|December 31, 2005                               |  |                | 1.55    | % |             |   | 1.38  | %     |  |   |      | % |  |   | 1.52    | %
|December 31, 2006                               |  |                | 2.17    | % |             |   | 2.66  | %     |  |   | 1.03  | % |  |   | 2.22    | %



|                      |                      |                         |        |        |      |   |        |        |   |   |        |        |  
|--------------------- | -------------------- | ----------------------- | ------ | ------ | ---- | - | ------ | ------ | - | - | ------ | ------ | -
|                      |                      | Year Ended December 31, |       
|                      |                      |                         |       
|                      |                      | 2006                    |        |        | 2005 |   |        | 2004   |  
|                      |                      |                         |        |        |      |   |        |        |  
|                      |                      | (In millions)           |       
|Mortgage loans:       |                      |                         |        |        |      |   |        |        |   |   |        |       
|                      | Prime conforming     |                         | $      | (1.1   | )    |   | $      | (0.1   | ) |   | $      |       |  
|                      | Prime non-conforming |                         |        | (29.6  | )    |   |        | (29.5  | ) |   |        | (44.7  | )
|                      | Prime second-lien    |                         |        | (45.2  | )    |   |        | (7.2   | ) |   |        | (8.5   | )
|                      | Government           |                         |        |       |      |   |        |       |   |   |        | (0.2   | )
|                      | Nonprime             |                         |        | (598.0 | )    |   |        | (370.0 | ) |   |        | (376.4 | )
|Lending receivables:  |                      |                         |        |        |      |   |        |        |   |   |        |       
|                      | Warehouse            |                         |        | (0.8   | )    |   |        | (0.5   | ) |   |        | 3.0    |  
|                      | Construction         |                         |        | (2.3   | )    |   |        | (1.9   | ) |   |        | (18.9  | )
|                      | Healthcare           |                         |        |       |      |   |        |       |   |   |        |       |  
|                      | Other                |                         |        | (5.0   | )    |   |        | (4.0   | ) |   |        | (0.5   | )
|Other                 |                      |                         | (0.3   | )      |      |   |       |        |   |   |       |       
|                      |                      |                         |        |        |      |   |        |        |  
|Total Net Charge-Offs |                      | $                       | (682.3 | )      |      | $ | (413.2 | )      |   | $ | (446.2 | )     
|                      |                      |                         |        |        |      |   |        |        |  

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| |                     
| | --------------------
| | Nonperforming Assets





|                                                                                                               |                      |                        |         |     |         |   |         |   |         | 
|-------------------------------------------------------------------------------------------------------------- | -------------------- | ---------------------- | ------- | --- | ------- | - | ------- | - | ------- | 
|                                                                                                               |                      | As of December 31,     |        
|                                                                                                               |                      |                        |        
|                                                                                                               |                      | 2006                   |         |     | 2005    |  
|                                                                                                               |                      |                        |         |     |         |  
|                                                                                                               |                      | (In millions)          |        
|Nonaccrual loans:                                                                                              |                      |                        |         |     |         |   |         |  
|                                                                                                               | Mortgage loans:      |                        |         |     |         |   |         |   |        
|                                                                                                               |                      | Prime conforming       |         | $   | 11.3    |   |         | $ | 9.8     | 
|                                                                                                               |                      | Prime non-conforming   |         |     | 419.4   |   |         |   | 361.7   | 
|                                                                                                               |                      | Government             |         |     | 0.2     |   |         |   | 0.1     | 
|                                                                                                               |                      | Prime second-lien      |         |     | 142.1   |   |         |   | 84.8    | 
|                                                                                                               |                      | Nonprime*              |         |     | 6,736.2 |   |         |   | 5,730.7 | 
|                                                                                                               | Lending receivables: |                        |         |     |         |   |         |   |        
|                                                                                                               |                      | Warehouse**            |         |     | 1,317.7 |   |         |   | 41.8    | 
|                                                                                                               |                      | Construction***        |         |     | 68.8    |   |         |   | 8.6     | 
|                                                                                                               |                      | Commercial real estate |         |     |        |   |         |   | 17.0    | 
|                                                                                                               | Other                |                        |         | 0.1 |         |   |         |  |        
|                                                                                                               |                      |                        |         |     |         |  
|Total nonaccrual loans                                                                                         |                      |                        | 8,695.8 |     |         |   | 6,254.5 |  
|Restructured loans                                                                                             |                      |                        | 7.8     |     |         |   | 22.8    |  
|Foreclosed assets                                                                                              |                      |                        | 1,140.7 |     |         |   | 506.5   |  
|                                                                                                               |                      |                        |         |     |         |  
|Total nonperforming assets                                                                                     |                      | $                      | 9,844.3 |     |         | $ | 6,783.8 |  
|                                                                                                               |                      |                        |         |     |         |  
|Total nonaccrual loans as a percentage of total mortgage loans
    held for investment and lending receivables |                      |                        | 10.3    | %   |         |   | 7.6     | %
|                                                                                                               |                      |                        |         |     |         |  
|Total nonperforming assets as a percentage of total consolidated
    assets                                    |                      |                        | 7.3     | %   |         |   | 5.7     | %
|                                                                                                               |                      |                        |         |     |         |  






|   |                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | Includes $414.7 million as of December 31, 2006 and
    $374.1 million as of December 31, 2005 of loans that
    were purchased distressed and already in nonaccrual status. In
    addition, includes $3.3 million of nonaccrual loans as of
    December 31, 2006 that are not included in
    Restructured Loans.
|  
|** | Includes $10.1 million of nonaccrual restructured loans as
    of December 31, 2006 that are not included in
    Restructured Loans.                                                                                                                                                                                



|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*** | Includes $18.8 million as of December 31, 2006 and
    $8.6 million as of December 31, 2005 of nonaccrual
    restructured loans, that are not included in Restructured
    Loans.



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|                               |                 |                       |        |            |       |  |       |        |            |   |        |       |  |  |       |     | 
|------------------------------ | --------------- | --------------------- | ------ | ---------- | ----- |  | ----- | ------ | ---------- | - | ------ | ----- |  |  | ----- | --- | 
|                               |                 | As of December 31,    |       
|                               |                 |                       |       
|                               |                 | 2006                  |        |            | 2005  | 
|                               |                 |                       |        |            |       | 
|                               |                 |                       |        | Percent of |       |  |       |        | Percent of |  
|                               |                 | Amount                |        |            | Total |  |       | Amount |            |   | Total  |      
|                               |                 |                       |        |            |       |  |       |        |            |   |        |      
|                               |                 | (Dollars in millions) |       
|Current                        |                 | $                     | 55,964 |            |       |  | 81.3  | %      |            | $ | 56,576 |       |  |  | 83.3  | %  
|Past due:                      |                 |                       |        |            |       |  |       |        |            |   |        |       |  |  |       |    
|                               | 30 to 59 days   |                       |        | 4,273      |       |  |       | 6.2    |            |   |        | 4,773 |  |  |       | 7.0 | 
|                               | 60 to 89 days   |                       |        | 1,818      |       |  |       | 2.6    |            |   |        | 1,528 |  |  |       | 2.2 | 
|                               | 90 days or more |                       |        | 3,403      |       |  |       | 5.0    |            |   |        | 2,258 |  |  |       | 3.3 | 
|Foreclosures pending           |                 |                       | 2,132  |            |       |  | 3.1   |        |            |   | 1,356  |       |  |  | 2.0   |    
|Bankruptcies                   |                 |                       | 1,219  |            |       |  | 1.8   |        |            |   | 1,520  |       |  |  | 2.2   |    
|                               |                 |                       |        |            |       |  |       |        |            |   |        |      
|Total unpaid principal balance |                 |                       | 68,809 |            |       |  | 100.0 | %      |            |   | 68,011 |       |  |  | 100.0 | %  
|                               |                 |                       |        |            |       |  |       |        |            |   |        |      
|Net premiums                   |                 |                       | 627    |            |       |  |       |        |            |   | 948    |       |  |  |       |    
|                               |                 |                       |        |            |       |  |       |        |            |   |        |      
|Total                          |                 | $                     | 69,436 |            |       |  |       |        |            | $ | 68,959 |       |  |  |       |    
|                               |                 |                       |        |            |       |  |       |        |            |   |        |      





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interest-only non-conforming non-conforming non-conforming), loan-to


|                                                                  |                                                     |                    |   |          |      |  |   |          | 
|----------------------------------------------------------------- | --------------------------------------------------- | ------------------ | - | -------- | ---- |  | - | -------- | 
|                                                                  |                                                     | Unpaid Principal   |  
|                                                                  |                                                     | as of December 31, |  
|                                                                  |                                                     |                    |  
|                                                                  |                                                     | 2006               |   |          | 2005 | 
|                                                                  |                                                     |                    |   |          |      | 
|                                                                  |                                                     | (In millions)      |  
|Mortgage Loans Held for Sale  Domestic                           |                                                     |                    |   |          |      |  |   |         
|                                                                  | Interest-only mortgage loans                        |                    | $ | 4,999.8  |      |  | $ | 3,316.3  | 
|                                                                  | Payment option adjustable rate mortgage loans       |                    |   | 1,838.1  |      |  |   | 1,097.6  | 
|                                                                  | High loan-to-value (100% or more) mortgage loans    |                    |   | 770.3    |      |  |   | 391.7    | 
|                                                                  | Below market initial rate (teaser) mortgage loans |                    |   | 24.9     |      |  |   | 16.6     | 
|                                                                 
|Mortgage Loans Held for Investment  Domestic                     |                                                     |                    |   |          |      |  |   |         
|                                                                  | Interest-only mortgage loans                        |                    | $ | 12,521.3 |      |  | $ | 11,118.9 | 
|                                                                  | Payment option adjustable rate mortgage loans       |                    |   | 117.0    |      |  |   | 16.3     | 
|                                                                  | High loan-to-value (100% or more) mortgage loans    |                    |   | 11,043.3 |      |  |   | 12,904.7 | 
|                                                                  | Below market initial rate (teaser) mortgage loans |                    |   | 167.2    |      |  |   | 394.8    | 
|                                                                 
|Mortgage Loans  Held for Sale and Investment 
    International |                                                     |                    |   |          |      |  |   |         
|                                                                  | Interest-only mortgage loans                        |                    | $ | 4,895.1  |      |  | $ | 4,925.9  | 
|                                                                  | Payment option adjustable rate mortgage loans       |                    |   |         |      |  |   |         | 
|                                                                  | High loan-to-value (100% or more) mortgage loans    |                    |   | 164.2    |      |  |   | 67.9     | 
|                                                                  | Below market initial rate (teaser) mortgage loans |                    |   |         |      |  |   |         | 



|                                                    |  |                    |          |  |      |   |          | 
|--------------------------------------------------- |  | ------------------ | -------- |  | ---- | - | -------- | 
|                                                    |  | Loan Production    |         
|                                                    |  | for the Year       |         
|                                                    |  | Ended December 31, |         
|                                                    |  |                    |         
|                                                    |  | 2006               |          |  | 2005 |  
|                                                    |  |                    |          |  |      |  
|                                                    |  | (In millions)      |         
|Interest-only mortgage loans                        |  | $                  | 48,335.2 |  |      | $ | 43,298.1 | 
|Payment option adjustable rate mortgage loans       |  |                    | 18,308.2 |  |      |   | 5,076.7  | 
|High loan-to-value (100% or more) mortgage loans    |  |                    | 8,768.3  |  |      |   | 6,610.1  | 
|Below market initial rate (teaser) mortgage loans |  |                    | 257.0    |  |      |   | 536.6    | 



Liquidity and Capital Resources




| |                     
| | --------------------
| | Liquidity Management



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| |   |                                                                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining sufficient short-term and long-term financing: We
    have significant short-term and long-term financing needs. We
    manage our liquidity by financing our assets in a manner
    consistent with their liquidity profile.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | Short-term financing: We require short-term funding to finance
    our mortgage loans held for sale, lending receivables and
    various other liquid assets. We forecast our cash position and
    our potential funding needs daily, taking into account debt
    maturities and potential peak balance sheet levels over a medium
    term time horizon. We also manage the timing of all debt
    maturities to limit any concentrations. As of December 31,
    2006, available sources of short-term liquidity totaled
    $88.8 billion.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | Long-term financing: Our long-term financing needs arise
    primarily from our mortgage loans held for investment, mortgage
    servicing rights, real estate investments and assets used for
    over-collateralization of our funding conduits. We manage our
    long-term debt maturities and credit facility expirations to
    minimize refinancing risk and maturity concentrations. Further,
    we endeavor to obtain an appropriate debt funding mix to
    complement our equity capital. We consider the available
    capacity and relative cost given market constraints, as well as
    our commitment to our credit ratings. We regularly assess the
    term structure of our assets and liabilities and interest rate
    risk. We limit the liability maturities in any one period
    (monthly, quarterly and annually). Consequently, we have
    achieved what we believe is a well-laddered unsecured maturity
    profile. Our long-term debt typically consists of collateralized
    borrowings in securitization trusts, unsecured debt issued in
    the public debt capital markets and secured financing through
    the Federal Home Loan Bank (FHLB).



|                                              |       |                          |         |         |      |   |         |         |  |   |         |         |  |      |         |         |      |   |         |         |  |   |       |       |      |   |         |         |  |   |   |   |  |   |       |       |  |   |          |          | 
|--------------------------------------------- | ----- | ------------------------ | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- |  | ---- | ------- | ------- | ---- | - | ------- | ------- |  | - | ----- | ----- | ---- | - | ------- | ------- |  | - | - | - |  | - | ----- | ----- |  | - | -------- | -------- | 
|                                              |       | Year Ending December 31, |        
|                                              |       |                          |        
|                                              |       | 2007                     |         |         | 2008 |   |         | 2009    |  |   | 2010    |         |  | 2011 |         |         | 2012 |   |         | 2013    |  |   | 2014  |       | 2015 |   |         | Total   | 
|                                              |       |                          |         |         |      |   |         |         |  |   |         |         |  |      |         |         |      |   |         |         |  |   |       |       |      |   |         |         | 
|                                              |       | (In millions)            |        
|Domestic senior unsecured notes               |       | $                        | 1,000.0 |         |      | $ | 2,492.1 |         |  | $ | 750.0   |         |  | $    | 2,424.0 |         |      | $ | 1,492.8 |         |  | $ |      |       |      | $ | 1,768.6 |         |  | $ |  |   |  | $ | 734.2 |       |  | $ | 10,661.7 |         
|Domestic subordinated unsecured notes         |       |                          |        |         |      |   |        |         |  |   | 1,000.0 |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 1,000.0  |         
|Domestic third-party bank credit facility     |       |                          |        |         |      |   | 1,750.0 |         |  |   |        |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 1,750.0  |         
|Euro-denominated senior unsecured note        |       |                          |        |         |      |   |        |         |  |   |        |         |  |      |        |         |      |   |        |         |  |   | 978.7 |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 978.7    |         
|Sterling-denominated senior unsecured note    |       |                          |        |         |      |   |        |         |  |   |        |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   | 768.4   |         |  |   |  |   |  |   |      |       |  |   | 768.4    |         
|Canadian dollar-denominated medium-term notes |       |                          |        |         |      |   | 215.2   |         |  |   |        |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 215.2    |         
|Mexican peso-denominated medium-term notes    |       |                          | 220.9   |         |      |   |        |         |  |   | 207.5   |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 428.4    |         
|Reales-denominated bank line of credit        |       |                          |        |         |      |   |        |         |  |   | 21.8    |         |  |      |        |         |      |   |        |         |  |   |      |       |      |   |        |         |  |   |  |   |  |   |      |       |  |   | 21.8     |         
|                                              |       |                          |         |         |      |   |         |         |  |   |         |         |  |      |         |         |      |   |         |         |  |   |       |       |      |   |         |         |  |  
|                                              | Total |                          | $       | 1,220.9 |      |   | $       | 4,457.3 |  |   | $       | 1,979.3 |  |      | $       | 2,424.0 |      |   | $       | 1,492.8 |  |   | $     | 978.7 |      |   | $       | 2,537.0 |  |   | $ |  |  |   | $     | 734.2 |  |   | $        | 15,824.2 | 
|                                              |       |                          |         |         |      |   |         |         |  |   |         |         |  |      |         |         |      |   |         |         |  |   |       |       |      |   |         |         |  |  

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|              |  |                          |       |      |      |   |         |      |  |   |         |  |  |      |       |  |      |   |         |      |  |   |       |  |            |   |       |       |  |   |   |  |  |   |       |  |  |   |         | 
|------------- |  | ------------------------ | ----- | ---- | ---- | - | ------- | ---- |  | - | ------- |  |  | ---- | ----- |  | ---- | - | ------- | ---- |  | - | ----- |  | ---------- | - | ----- | ----- |  | - | - |  |  | - | ----- |  |  | - | ------- | 
|              |  | Year Ending December 31, |      
|              |  |                          |      
|              |  |                          |       | 2015 |      |   |        
|              |  |                          |       | and  |      |   |        
|              |  | 2007                     |       |      | 2008 |   |         | 2009 |  |   | 2010    |  |  | 2011 |       |  | 2012 |   |         | 2013 |  |   | 2014  |  | thereafter |   |       | Total | 
|              |  |                          |       |      |      |   |         |      |  |   |         |  |  |      |       |  |      |   |         |      |  |   |       |  |            |   |       |       | 
|              |  | (In millions)            |      
|FHLB advances |  | $                        | 246.0 |      |      | $ | 1,082.0 |      |  | $ | 1,840.0 |  |  | $    | 976.0 |  |      | $ | 1,362.0 |      |  | $ | 462.0 |  |            | $ | 814.0 |       |  | $ |  |  |  | $ | 497.0 |  |  | $ | 7,279.0 | 



| |                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have an $875 million committed syndicated revolving
    credit facility available to us that expires in 2008. As of
    December 31, 2006, there were no amounts outstanding under
    this facility.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c. | Interest Rate Management: The interest rate risk profile of our
    liquidity can be separated from the actual issuances using
    derivative financial products. We issue both fixed and variable
    rate debt in a range of currencies. We use derivative contracts,
    primarily interest rate swaps, to effectively convert a portion
    of our fixed rate debt to variable rate debt and variable rate
    debt to fixed rate debt. The maturity structure of the
    derivatives generally corresponds to the maturity structure of
    the debt being hedged. In addition, we use other derivative
    contracts to manage the foreign exchange impact of certain debt
    issuances.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining diversified sources of funding: The funding sources
    utilized are primarily determined by the type of asset financed
    and associated with a particular product or business. We
    diversify our financing programs, credit providers, debt
    investors and dealers to reduce reliance upon any one source of
    liquidity. We continue to diversify our funding strategy in
    order to promote improved pricing and drive access to new
    sources of liquidity, including:



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | Optimize our use of secured funding programs: A majority of our
    assets are pledged as collateral to support various funding
    programs. As a result, significant sources of funding have been
    developed in the mortgage and asset-backed securities markets.
    Also, we obtain liquidity and long-term funding in the term
    securitization market for our held for investment mortgage loan
    portfolio.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | Concentrate and diversify our unsecured funding sources at the
    ResCap parent level: ResCap provides independent access to the
    unsecured debt market to further diversify its funding sources
    and optimize balance of liabilities between secured and
    unsecured programs. The strategy provides greater control,
    reduced financing costs, wider name recognition by creditors,
    and greater flexibility to meet variable funding needs of our
    business segments. Where legal entity, regulatory, country
    differences or other business segment considerations make this
    impractical, some business segments enter into their own
    financing arrangements. We regularly assess the reliability and
    concentrations of our funding sources. We strive to continually
    expand and globally diversify our funding programs, markets and
    investor and creditor base to minimize reliance on any one
    source or region.



| |    |                                                                                                                                                                       
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c. | GMAC Bank: GMAC Bank provides us with another source of
    liquidity through its ability to accept deposits and obtain FHLB
    advances and federal funds purchased.



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining sufficient reserve liquidity: We maintain a
    portfolio of money market instruments to support cash
    fluctuations, which we consider our liquidity portfolio. In
    addition, we maintain domestic unsecured revolving bank credit
    facilities that are available to cover contingent funding needs.
    The facilities are comprised of a
    364-day revolver which
    matures in July 2007 and a
    3-year syndicated
    revolver which matures in July 2008. Our Canadian operations
    maintain an unsecured Canadian syndicated bank line.

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|                                           |       |               |         |           |            |   |         |           |  |   |         |         | 
|------------------------------------------ | ----- | ------------- | ------- | --------- | ---------- | - | ------- | --------- |  | - | ------- | ------- | 
|                                           |       |               |         | Unsecured |            |   | Total   |          
|                                           |       | Unsecured     |         |           | Committed- |   |         | Unsecured | 
|                                           |       | Committed-    |         |           | Unused     |   |         | Committed | 
|                                           |       | Outstanding   |         |           | Capacity   |   |         | Capacity  | 
|                                           |       |               |         |           |            |   |         |           | 
|                                           |       | (In millions) |        
|Liquidity portfolio (investment balance)   |       | $             |        |           |            | $ | 1,068.4 |           |  | $ | 1,068.4 |        
|Syndicated bank credit facilities revolver |       |               |        |           |            |   | 875.0   |           |  |   | 875.0   |        
|364-day bank credit facilities revolver    |       |               |        |           |            |   | 875.0   |           |  |   | 875.0   |        
|International bank lines                   |       |               | 216.3   |           |            |   | 144.5   |           |  |   | 360.8   |        
|Bank term loan                             |       |               | 1,750.0 |           |            |   |        |           |  |   | 1,750.0 |        
|                                           |       |               |         |           |            |   |         |           | 
|                                           | Total |               | $       | 1,966.3   |            |   | $       | 2,962.9   |  |   | $       | 4,929.2 | 
|                                           |       |               |         |           |            |   |         |           | 



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining an active dialogue with the rating agencies: Our
    ability to meet our funding needs is influenced by the rating
    agencies requirements. These requirements impact our
    capital structure and growth rate. We have obtained ratings from
    four agencies and maintain an active dialogue with each
    throughout the year. While changes in the business environment
    and company performance may impact ratings, management remains
    committed to maintaining investment grade ratings.
|
| |  | Prudent management oversight/governance process: In order to
    ensure that both daily and strategic funding activities are
    appropriate and consistent with policy, as well as actively
    monitor the risk associated with our funding needs and capital
    structure, we have established the following oversight and
    control:                                                                                                                                                                           



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. | Liquidity and Funding Committee (LFC): The LFC determines the
    optimal financial structure of ResCap and its principal
    businesses, reviews funding plans for business units, sets
    frameworks on funding and liquidity, facilitates liquidity and
    funding discussions across ResCap, and coordinates standard of
    care for all ResCap investor partners in order to have a
    coordinated relationship across the enterprise. The LFC also
    oversees monitoring of our contingency funding plans. The
    committee is chaired by our Chief Financial Officer and includes
    our Corporate and Assistant Treasurer, and treasurers and senior
    finance officers from all business units.



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | Global Treasury Function: Liquidity is managed locally by our
    business unit treasurers with an active corporate oversight
    function and surveillance. Our global treasury operations meets
    regularly to review overall liquidity, track asset levels,
    collateral and funding availability in order to maintain
    flexibility to meet our financial commitments and make
    recommendations to senior management.



| |    |                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c. | Daily Liquidity Management: Liquidity is managed centrally in
    conjunction with each business segment. These operations review
    the projected cash position, funding plans, funding pipeline and
    manage our daily cash needs.



| |                   
| | ------------------
| | Capital Management





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| |                
| | ---------------
| | Funding Sources



|                                      |                                      |                               |           |          |           |   |          |          |           | 
|------------------------------------- | ------------------------------------ | ----------------------------- | --------- | -------- | --------- | - | -------- | -------- | --------- | 
|                                      |                                      | Outstanding as of             |          
|                                      |                                      | December 31,                  |          
|                                      |                                      |                               |          
|                                      |                                      | 2006                          |           |          | 2005      |  
|                                      |                                      |                               |           |          |           |  
|                                      |                                      | (In millions)                 |          
|Affiliate borrowings  short-term     |                                      | $                             |          |          |           | $ | 1,047.5  |         
|Affiliate borrowings  long-term      |                                      |                               |          |          |           |   | 4,130.0  |         
|Collateralized borrowings  long-term |                                      |                               | 53,299.5  |          |           |   | 56,097.8 |         
|                                      | Senior unsecured notes  long-term   |                               |           | 12,408.8 |           |   |          | 5,150.5  |          
|                                      | Subordinated unsecured note          |                               |           | 1,000.0  |           |   |          |         |          
|                                      | Term loans and revolvers  long-term |                               |           | 1,750.0  |           |   |          | 1,750.0  |          
|                                      | Bank lines  short-term              |                               |           | 756.0    |           |   |          | 1,015.3  |          
|                                      | Bank lines  long-term               |                               |           | 21.8     |           |   |          |         |          
|                                      | Other unsecured  short-term         |                               |           | 392.7    |           |   |          | 261.8    |          
|                                      | Other unsecured  long-term          |                               |           | 643.6    |           |   |          | 282.3    |          
|                                      |                                      |                               |           |          |           |  
|Subtotal unsecured borrowings         |                                      |                               | 16,972.9  |          |           |   | 8,459.9  |         
|                                      | Secured  short-term                 |                               |           | 29,065.9 |           |   |          | 24,674.0 |          
|                                      | Secured  long-term                  |                               |           | 6,562.6  |           |   |          | 4,738.6  |          
|                                      | FHLB  short-term                    |                               |           |         |           |   |          | 1,506.0  |          
|                                      | FHLB  long-term                     |                               |           | 7,279.0  |           |   |          | 2,922.0  |          
|                                      |                                      |                               |           |          |           |  
|Subtotal secured borrowings           |                                      |                               | 42,907.5  |          |           |   | 33,840.6 |         
|                                      |                                      |                               |           |          |           |  
|                                      |                                      | Total borrowings              |           |          | 113,179.9 |   |          |          | 103,575.8 | 
|Bank deposits                         |                                      |                               | 9,851.0   |          |           |   | 4,123.3  |         
|                                      |                                      |                               |           |          |           |  
|                                      |                                      | Total borrowings and deposits |           |          | 123,030.9 |   |          |          | 107,699.1 | 
|Off-balance sheet financings          |                                      |                               | 119,295.8 |          |           |   | 78,290.7 |         
|                                      |                                      |                               |           |          |           |  
|                                      |                                      | Total                         |           | $        | 242,326.7 |   |          | $        | 185,989.8 | 
|                                      |                                      |                               |           |          |           |  



|              |                  |                                |           |           |                  |  |    |        |   |   |                  |           |  |  |    |     |  
|------------- | ---------------- | ------------------------------ | --------- | --------- | ---------------- |  | -- | ------ | - | - | ---------------- | --------- |  |  | -- | --- | -
|              |                  | Outstanding as of December 31, |          
|              |                  |                                |          
|              |                  | 2006                           |           |           | 2005             | 
|              |                  |                                |           |           |                  | 
|              |                  | Amount                         |           |           | Percent of Total |  |    | Amount |   |   | Percent of Total |          
|              |                  |                                |           |           |                  |  |    |        |   |   |                  |          
|              |                  | (Dollars in millions)          |          
|Domestic      |                  | $                              | 100,307.5 |           |                  |  | 89 | %      |   | $ | 93,836.8         |           |  |  | 91 | %  
|International |                  |                                | 12,872.4  |           |                  |  | 11 |        |   |   | 9,739.0          |           |  |  | 9  |    
|              |                  |                                |           |           |                  |  |    |        |   |   |                  |          
|              | Total Borrowings |                                | $         | 113,179.9 |                  |  |    | 100    | % |   | $                | 103,575.8 |  |  |    | 100 | %
|              |                  |                                |           |           |                  |  |    |        |   |   |                  |          

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|                                                                                 |  |                    |          |               |                 |   |          |          |  |   |               |  |  |                 |          |  |          |   |          |  |  |   |          | 
|-------------------------------------------------------------------------------- |  | ------------------ | -------- | ------------- | --------------- | - | -------- | -------- |  | - | ------------- |  |  | --------------- | -------- |  | -------- | - | -------- |  |  | - | -------- | 
|                                                                                 |  | As of December 31, |         
|                                                                                 |  |                    |         
|                                                                                 |  | 2006               |          |               | 2005            |  
|                                                                                 |  |                    |          |               |                 |  
|                                                                                 |  |                    |          | Total Secured |                 |   |          |          |  |   | Total Secured |  |  |                
|                                                                                 |  | Outstanding        |          |               | Unused Capacity |   |          | Capacity |  |   | Outstanding   |  |  | Unused Capacity |          |  | Capacity |  
|                                                                                 |  |                    |          |               |                 |   |          |          |  |   |               |  |  |                 |          |  |          |  
|                                                                                 |  | (In millions)      |         
|Mortgage Interest Networking Trust                                               |  | $                  | 1,402.9  |               |                 | $ | 23,597.1 |          |  | $ | 25,000.0      |  |  | $               | 6,741.3  |  |          | $ | 18,258.7 |  |  | $ | 25,000.0 | 
|MINT II, LLC                                                                     |  |                    | 5,831.2  |               |                 |   | 19,168.8 |          |  |   | 25,000.0      |  |  |                 |         |  |          |   |         |  |  |   |         | 
|Repurchase agreements                                                            |  |                    | 11,505.5 |               |                 |   | 7,813.4  |          |  |   | 19,318.9      |  |  |                 | 9,896.7  |  |          |   | 7,303.4  |  |  |   | 17,200.1 | 
|Receivables Lending Agreement                                                    |  |                    | 5,250.0  |               |                 |   | 322.8    |          |  |   | 5,572.8       |  |  |                 | 2,900.0  |  |          |   |         |  |  |   | 2,900.0  | 
|Mortgage Asset Lending Agreement                                                 |  |                    | 1,120.0  |               |                 |   | 1,836.3  |          |  |   | 2,956.3       |  |  |                 | 3,260.0  |  |          |   | 3,610.0  |  |  |   | 6,870.0  | 
|Bank facilities for construction and commercial business lending
    receivables |  |                    | 1,700.0  |               |                 |   |         |          |  |   | 1,700.0       |  |  |                 | 1,055.0  |  |          |   | 220.0    |  |  |   | 1,275.0  | 
|Bank facility for mortgage servicing rights                                      |  |                    | 1,275.0  |               |                 |   | 25.0     |          |  |   | 1,300.0       |  |  |                 | 1,000.0  |  |          |   |         |  |  |   | 1,000.0  | 
|Other                                                                            |  |                    | 7,543.9  |               |                 |   | 4,671.6  |          |  |   | 12,215.5      |  |  |                 | 4,559.6  |  |          |   | 2,993.6  |  |  |   | 7,553.2  | 
|                                                                                 |  |                    |          |               |                 |   |          |          |  |   |               |  |  |                 |          |  |          |  
|Total excluding FHLB advances                                                    |  |                    | 35,628.5 |               |                 |   | 57,435.0 |          |  |   | 93,063.5      |  |  |                 | 29,412.6 |  |          |   | 32,385.7 |  |  |   | 61,798.3 | 
|FHLB advances                                                                    |  |                    | 7,279.0  |               |                 |   | 2,305.3  |          |  |   | 9,584.3       |  |  |                 | 4,428.0  |  |          |   | 2,677.2  |  |  |   | 7,105.2  | 
|                                                                                 |  |                    |          |               |                 |   |          |          |  |   |               |  |  |                 |          |  |          |  
|Total secured borrowings                                                         |  | $                  | 42,907.5 |               |                 | $ | 59,740.3 |          |  | $ | 102,647.8     |  |  | $               | 33,840.6 |  |          | $ | 35,062.9 |  |  | $ | 68,903.5 | 
|                                                                                 |  |                    |          |               |                 |   |          |          |  |   |               |  |  |                 |          |  |          |  





| |                                                   
| | --------------------------------------------------
| | Collateralized Borrowings in Securitization Trusts







| |                   
| | ------------------
| | Secured Borrowings



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|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |   |          |  |  |   |          | 
|------------------------------------- |  | ----------------------- | -------- | ------- | ----------- | - | -------- | ----------- |  | ----- | --------- |  |  | ----------- | ------- |  | -------- | - | -------- |  |  | - | -------- | 
|                                      |  | As of December 31, 2006 |         
|                                      |  |                         |         
|                                      |  |                         |          | Secured |             |   | Secured  |             |  | Total |          
|                                      |  | Secured                 |          |         | Secured     |   |          | Total       |  |       | Committed |  |  | Uncommitted |         |  | Secured  |  
|                                      |  | Committed               |          |         | Uncommitted |   |          | Secured     |  |       | Unused    |  |  | Unused      |         |  | Unused   |  
|                                      |  | Outstanding             |          |         | Outstanding |   |          | Outstanding |  |       | Capacity  |  |  | Capacity    |         |  | Capacity |  
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  
|                                      |  | (In millions)           |         
|Mortgage loans & warehouse lending(a) |  | $                       | 17,815.3 |         |             | $ | 21,388.4 |             |  | $     | 39,203.7  |  |  | $           | 7,655.7 |  |          | $ | 51,888.3 |  |  | $ | 59,544.0 | 
|Other lending receivables(b)          |  |                         | 1,700.0  |         |             |   |         |             |  |       | 1,700.0   |  |  |             |        |  |          |   |         |  |  |   |         | 
|Mortgage servicing rights(c)          |  |                         | 1,275.0  |         |             |   |         |             |  |       | 1,275.0   |  |  |             | 25.0    |  |          |   |         |  |  |   | 25.0     | 
|Other                                 |  |                         | 728.8    |         |             |   |         |             |  |       | 728.8     |  |  |             | 171.3   |  |          |   |         |  |  |   | 171.3    | 
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  
|                                      |  | $                       | 21,519.1 |         |             | $ | 21,388.4 |             |  | $     | 42,907.5  |  |  | $           | 7,852.0 |  |          | $ | 51,888.3 |  |  | $ | 59,740.3 | 
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  

|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |   |          |  |  |   |          | 
|------------------------------------- |  | ----------------------- | -------- | ------- | ----------- | - | -------- | ----------- |  | ----- | --------- |  |  | ----------- | ------- |  | -------- | - | -------- |  |  | - | -------- | 
|                                      |  | As of December 31, 2005 |         
|                                      |  |                         |         
|                                      |  |                         |          | Secured |             |   | Secured  |             |  | Total |          
|                                      |  | Secured                 |          |         | Secured     |   |          | Total       |  |       | Committed |  |  | Uncommitted |         |  | Secured  |  
|                                      |  | Committed               |          |         | Uncommitted |   |          | Secured     |  |       | Unused    |  |  | Unused      |         |  | Unused   |  
|                                      |  | Outstanding             |          |         | Outstanding |   |          | Outstanding |  |       | Capacity  |  |  | Capacity    |         |  | Capacity |  
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  
|Mortgage loans & warehouse lending(a) |  | $                       | 14,364.0 |         |             | $ | 16,790.7 |             |  | $     | 31,154.7  |  |  | $           | 9,350.8 |  |          | $ | 25,324.0 |  |  | $ | 34,674.8 | 
|Other lending receivables(b)          |  |                         | 1,055.0  |         |             |   |         |             |  |       | 1,055.0   |  |  |             | 220.0   |  |          |   |         |  |  |   | 220.0    | 
|Mortgage servicing rights(c)          |  |                         | 1,000.0  |         |             |   |         |             |  |       | 1,000.0   |  |  |             |        |  |          |   |         |  |  |   |         | 
|Other                                 |  |                         | 630.9    |         |             |   |         |             |  |       | 630.9     |  |  |             | 168.1   |  |          |   |         |  |  |   | 168.1    | 
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  
|                                      |  | $                       | 17,049.9 |         |             | $ | 16,790.7 |             |  | $     | 33,840.6  |  |  | $           | 9,738.9 |  |          | $ | 25,324.0 |  |  | $ | 35,062.9 | 
|                                      |  |                         |          |         |             |   |          |             |  |       |           |  |  |             |         |  |          |  






|    |  |                                                                                             
|--- |  | --------------------------------------------------------------------------------------------
|(a) |  | Facilities to fund mortgage loan and warehouse lending
    receivables.                     
|   
|(b) |  | Facilities to fund residential construction and commercial
    business lending receivables.
|   
|(c) |  | Facilities to fund servicing advances, servicing rights and
    residual interests.         



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Mortgage Interest Networking Trust, or MINT, is a secured
    aggregation vehicle that provides us with financing for mortgage
    loans during the aggregation period and for warehouse lending
    receivables. MINT obtains financing through the issuance of
    asset-backed commercial paper and similar discounted notes
    (MITTENs), both of which are secured by the mortgage loans and
    warehouse lending receivables.
|
| |  | MINT II, LLC (MINT II) was created during the third
    quarter of 2006. MINT II is a secured aggregation vehicle
    that provides us with financing for mortgage loans during the
    aggregation period and for warehouse lending receivables.
    MINT II obtains financing through the issuance of
    extendable notes, which are secured by the mortgage loans and
    warehouse lending receivables. As                      

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | of December 31, 2006, MINT II had uncommitted
    liquidity of $25.0 billion with $5.8 billion of
    extendable notes outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | The Mortgage Asset Lending Agreement, or MALA, is a secured
    aggregation facility that funds residential mortgage loans,
    during the aggregation period. The facility receives funding
    from a syndicate of asset-backed commercial paper vehicles. MALA
    shares a funding commitment with Receivables Lending Agreement,
    or RLA, an asset-backed commercial paper facility that funds our
    warehouse lending receivables. In November 2005, the existing
    RLA facility was terminated and a new facility under the same
    name created. The previous facility was accounted for as an
    off-balance sheet facility. The MALA and RLA facilities have
    both short-term and
    long-term commitments.
    The two facilities had aggregate liquidity commitments of
    $8.5 billion as of December 31, 2006, which were
    divided into a one-year commitment of $2.4 billion and a
    three-year commitment of $6.1 billion.
|
| |  | Other secured facilities include certain facilities to fund
    mortgage loans prior to their sale or securitization. As of
    December 31, 2006, in addition to MINT, MINT II, MALA and
    RLA, we had £4.6 billion of liquidity commitments to
    fund loans in the United Kingdom,
    1.3 billion
    of liquidity commitments to fund loans originated in The
    Netherlands and Germany and a 500.0 million Australian
    dollar of liquidity commitment to fund loans in Australia.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | We have developed numerous relationships with banks and
    securities firms to provide funding for mortgage loans and other
    securities through repurchase agreements and other similar
    arrangements on a domestic and international basis. Borrowings
    under these agreements are provided on either a committed or an
    uncommitted basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Other secured borrowings include facilities that fund
    construction and commercial business lending receivables, for
    which we had aggregate liquidity commitments of
    $1.7 billion as of December 31, 2006. In addition, we
    have arranged facilities to fund mortgage servicing rights and
    mortgage servicing advances either on a committed or uncommitted
    basis. These facilities provided aggregate liquidity commitments
    of $2.2 billion as of December 31, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | GMAC Bank has entered into an advances agreement with the
    Federal Home Loan Bank of Pittsburgh, or FHLB. As of
    December 31, 2006, we had total borrowing capacity of
    $9.6 billion under this agreement. Under the arrangement
    with the FHLB, we are able to fund mortgage loans, investments
    securities and certain lending receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 



| |                                
| | -------------------------------
| | Short-Term Unsecured Borrowings



|                         |                                       |                   |       |         |      |   |         |         | 
|------------------------ | ------------------------------------- | ----------------- | ----- | ------- | ---- | - | ------- | ------- | 
|                         |                                       | Outstanding as of |      
|                         |                                       | December 31,      |      
|                         |                                       |                   |      
|                         |                                       | 2006              |       |         | 2005 |  
|                         |                                       |                   |       |         |      |  
|                         |                                       | (In millions)     |      
|Affiliate borrowings     |                                       | $                 |      |         |      | $ | 1,047.5 |        
|Lines of credit          |                                       |                   | 475.0 |         |      |   | 447.4   |        
|Investor custodial funds |                                       |                   | 131.7 |         |      |   | 121.0   |        
|International borrowings |                                       |                   | 467.2 |         |      |   | 601.6   |        
|Other                    |                                       |                   | 74.8  |         |      |   | 107.1   |        
|                         |                                       |                   |       |         |      |  
|                         | Total short-term unsecured borrowings |                   | $     | 1,148.7 |      |   | $       | 2,324.6 | 
|                         |                                       |                   |       |         |      |  



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| |              
| | -------------
| | Bank Deposits





| |                             
| | ----------------------------
| | Off-Balance Sheet Financings







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Walnut Grove Funding is a secured aggregation facility that
    funds home equity loans, home equity lines of credit, high
    loan-to-value mortgage
    loans and certain non-conforming fixed rate mortgage loans
    through the issuance of asset-backed commercial paper. Walnut
    Grove Funding provided $275.4 million of funding as of
    December 31, 2006 and $582.6 million as of
    December 31, 2005, and was permitted to finance a maximum
    of $900 million as of December 31, 2006 and
    $600 million as of December 31, 2005.
|
| |  | Horsham Funding is a facility that funds defaulted government
    insured or guaranteed residential mortgage loans repurchased
    through the issuance of asset-backed commercial paper. Horsham
    Funding provided $102.4 million of funding as of
    December 31, 2006 and $134.6 million as of
    December 31, 2005, and was permitted to finance a maximum
    amount of $200 million as of December 31, 2006 and
    $250 million as of December 31, 2005.                                                                                    



| |               
| | --------------
| | Credit Ratings



|              |  |            |             |   |        |  |      |         |  |  |          | 
|------------- |  | ---------- | ----------- | - | ------ |  | ---- | ------- |  |  | -------- | 
|              |  | Commercial |             |   | Senior |  |      |        
|Rating Agency |  | Paper      |             |   | Debt   |  |      | Outlook | 
|              |  |            |             |   |        |  |      |         | 
|Fitch         |  |            | F2          |   |        |  | BBB  |         |  |  | Positive | 
|Moodys       |  |            | P-3         |   |        |  | Baa3 |         |  |  | Stable   | 
|S&P           |  |            | A-3         |   |        |  | BBB  |         |  |  | Negative | 
|DBRS          |  |            | R- 2(middle | ) |        |  | BBB  |         |  |  | Stable   | 

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| |                                 
| | --------------------------------
| | Purchase Obligations and Options













| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Asset Performance Conditional Calls  In
    certain of our securitizations, we retain the option (but not an
    obligation) to purchase specific mortgage loans that become
    delinquent beyond a specified period of time, as set forth in
    the transaction legal documents (typically 90 days).
    Mortgage loans are purchased after the option becomes
    exercisable when it is in our economic interest to do so. We
    purchased an aggregate of $324 million of mortgage loans in
    2006 and $99 million in 2005 under these provisions.

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Cleanup Calls  In each of our securitizations,
    we retain a cleanup call option that allows the servicer to
    purchase the remaining transferred assets once such assets reach
    a minimal level and the cost of servicing those assets becomes
    burdensome in relation to the benefits of servicing (defined as
    a specified percentage of the original principal balance). We
    choose to exercise cleanup calls when it is in our economic
    interest to do so. We purchased $1.1 billion of assets
    under these cleanup call provisions in 2006 and
    $2.2 billion of such assets in 2005.







| |           
| | ----------
| | Guarantees



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##### Table of Contents



Aggregate Contractual Obligations


|                                                           |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |         |         |  |   |          |          | 
|---------------------------------------------------------- | --------- | ---------------------- | --------- | --------- | ------ | - | -------- | --------- | --------- | - | --------- | -------- |  | ------- | ------- | ------- |  | - | -------- | -------- | 
|                                                           |           | Payments Due by Period |          
|                                                           |           |                        |          
|                                                           |           |                        |           | Less than |        |   |          |           | More than |  
|As of December 31, 2006                                    |           | Total                  |           |           | 1 Year |   |          | 1-3 Years |           |   | 3-5 Years |          |  | 5 Years |        
|                                                           |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |        
|                                                           |           | (In millions)          |          
|Description of obligation:                                 |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |         |         |  |   |          |         
|Debt                                                       |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |         |         |  |   |          |         
|                                                           | Unsecured |                        | $         | 16,972.9  |        |   | $        | 2,363.9   |           |   | $         | 6,441.6  |  |         | $       | 3,917.3 |  |   | $        | 4,250.1  | 
|                                                           | Secured   |                        |           | 96,207.0  |        |   |          | 28,353.8  |           |   |           | 10,290.5 |  |         |         | 2,411.8 |  |   |          | 55,150.9 | 
|Lease commitments                                          |           |                        | 492.9     |           |        |   | 108.8    |           |           |   | 139.6     |          |  |         | 84.3    |         |  |   | 160.2    |         
|Mortgage purchase commitments                              |           |                        | 34,950.4  |           |        |   | 26,294.4 |           |           |   | 5,591.1   |          |  |         | 95.3    |         |  |   | 2,969.6  |         
|Lending commitments                                        |           |                        | 9,018.7   |           |        |   | 6,328.3  |           |           |   | 1,406.2   |          |  |         | 626.5   |         |  |   | 657.7    |         
|Commitment to remit cash flows on certain loan portfolios  |           |                        | 5,333.9   |           |        |   | 5,333.9  |           |           |   |          |          |  |         |        |         |  |   |         |         
|Commitments to provide capital to equity method investees  |           |                        | 264.6     |           |        |   |         |           |           |   | 106.9     |          |  |         | 0.1     |         |  |   | 157.6    |         
|Purchase obligations*                                      |           |                        | 99.1      |           |        |   | 36.0     |           |           |   | 43.1      |          |  |         | 20.0    |         |  |   |         |         
|Commitments to fund development of lots and/or model homes |           |                        | 351.9     |           |        |   | 58.7     |           |           |   | 275.3     |          |  |         | 17.9    |         |  |   |         |         
|Bank certificates of deposit                               |           |                        | 6,686.2   |           |        |   | 3,969.0  |           |           |   | 2,253.1   |          |  |         | 424.2   |         |  |   | 39.9     |         
|                                                           |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |        
|Total                                                      |           | $                      | 170,377.6 |           |        | $ | 72,846.8 |           |           | $ | 26,547.4  |          |  | $       | 7,597.4 |         |  | $ | 63,386.0 |         
|                                                           |           |                        |           |           |        |   |          |           |           |   |           |          |  |         |        






|  |                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------
|* | Includes purchase obligations covered by non-cancellable
    contracts and contracts containing cancellation fees.

Recently Issued Accounting Standards


Statement of Financial Accounting Standards
No. 155 Accounting
for Certain Hybrid Financial Instruments (SFAS 155)


Financial Accounting Standards Board Staff
Position  FIN 46(R)-6 Determining the
Variability to Be Considered in Applying FASB Interpretation
No. 46(R)


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##### Table of Contents



Financial Accounting Standards Board Interpretation
No. 48 Accounting for Uncertainty in
Income Taxes more-likely-than more-likely-than more-likely-than


Staff Accounting Bulletin No. 108 Quantifying Financial Misstatements


Statement of Financial Accounting Standards
No. 157 Fair Value Measurements


Statement of Financial Accounting Standards
No. 158 Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans


Statement of Financial Accounting Standards
No. 159 The
Fair Value Option for Financial Assets and Financial Liabilities


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|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK.









| |                                                                    
| | -------------------------------------------------------------------
| | Interest Rate Lock Commitments and Mortgage Loans Held for
    Sale





| |                                                                         
| | ------------------------------------------------------------------------
| | Mortgage Servicing Rights and Our Interests From Our
    Securitizations



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | U.S. Treasury Securities: notes and bonds with maturities
    ranging from 10 to 30 years. As interest rates decline, the
    value of these securities increase.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Principal-Only Securities: the right to receive
    principal-only cash flows from a mortgage-backed security.
    Principal-only securities are sold at a deep discount from face
    value. As interest rates decline, prepayments increase the value
    of the principal-only securities. This increase in value results
    in an offset to the decline in value of the mortgage servicing
    rights. As interest rates rise, prepayments decline and the
    value of the principal-only securities decline as well. The
    decrease in value of the principal-only securities results in an
    offset to the increase in value of the mortgage servicing rights.
|
| | Long Interest Rate Futures Contracts: a futures contract
    is a guarantee of a transaction at a date in the future for an
    underlying Treasury debt security or Eurodollar contract. As
    interest rates decline, the futures contracts value
    increases, and when rates rise the contracts value
    declines. The increase or decrease in value of futures contracts
    result in an offset to the increase or decrease in the value of
    the mortgage servicing rights.                                                                                                                                                                                 
|
| | Long Call Options on U.S. Treasuries or Interest Rate
    Swaps: the right to buy the underlying assets by a certain
    date for a certain price. These instruments are purchased either
    via an exchange or over the counter and have maturities of less
    than one year. The option value increases as the underlying
    benchmark Treasurys or swaps interest rate declines.                                                                                                                                                                                                                                                                                  
|
| | Long Put Options on U.S. Treasuries or Interest Rate
    Swaps: the right to sell the underlying assets by a certain
    date for a certain price. These instruments are purchased either
    via an exchange or over the counter and have maturities of less
    than one year. The option value increases as the underlying
    Treasurys or swaps interest rate rises.                                                                                                                                                                                                                                                                                               
|
| | Long Mortgage-Backed Securities, U.S. Treasury and LIBOR
    Futures: an exchange traded derivative financial instrument
    to purchase a financial instrument at a certain future date for
    a specified price. Margins on futures are settled daily.
    Generally, the futures are rolled into subsequent issues (i.e.,
    we do not take delivery of the underlying instrument). As
    interest rates decline, the value of the futures contract and
    the underlying instrument increase in value. This increase in
    value offsets the declines in value of the mortgage servicing
    rights.                                                             
|
| | Interest Rate Floors: the right to receive cash if
    interest rates decline beyond a specified rate. As rates
    decline, the value of the floor increases. If rates decline
    below the floor rate, the seller of the floor pays us the
    difference between the market interest rate and the floor rate
    multiplied by the notional amount of the floor contract.                                                                                                                                                                                                                                                                                             
|
| | Interest Rate Caps: the right to receive cash if interest
    rates rise above a specified rate. The caps are purchased to
    adjust the profile of the overall hedge position and to limit
    devaluation of the hedge portfolio as interest rates increase.
    We use caps when pricing considerations indicate that these
    instruments present a more economically viable alternative to
    selling an interest rate floor or similar contract.                                                                                                                                                                                                                 
|
| | Receiver Swaptions: options on interest rate swaps to
    exchange variable cash flows for fixed. The fixed payments
    increase in value as interest rates decline. This increases the
    value of the swaption resulting in an offset to the decline in
    value of the mortgage servicing rights.                                                                                                                                                                                                                                                                                                                                                                   

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| |                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Interest Rate Swaps: a mutual agreement to swap interest
    rate payments with another party. The swaps provide gains when
    interest rates decline and losses when interest rates increase.



| |                
| | ---------------
| | Debt Securities





| |              
| | -------------
| | Value at Risk





|              |         |               |   |      |      |  |   |       | 
|------------- | ------- | ------------- | - | ---- | ---- |  | - | ----- | 
|              |         | Year Ended    |  
|              |         | December 31,  |  
|              |         |               |  
|              |         | 2006          |   |      | 2005 | 
|              |         |               |   |      |      | 
|              |         | (In millions) |  
|Value at Risk |         |               |   |      |      |  |   |      
|              | Maximum |               | $ | 80.7 |      |  | $ | 120.4 | 
|              | Average |               |   | 42.7 |      |  |   | 76.7  | 
|              | Minimum |               |   | 14.7 |      |  |   | 44.4  | 





| |                     
| | --------------------
| | Sensitivity Analysis



|                                                                                           |  |                    |         |   |         |   |       |             |  |   |         |   |  |   |       |  
|------------------------------------------------------------------------------------------ |  | ------------------ | ------- | - | ------- | - | ----- | ----------- |  | - | ------- | - |  | - | ----- | -
|                                                                                           |  | As of December 31, |        
|                                                                                           |  |                    |        
|                                                                                           |  | 2006               |         |   | 2005    |  
|                                                                                           |  |                    |         |   |         |  
|                                                                                           |  | Non-Trading        |         |   | Trading |   |       | Non-Trading |  |   | Trading |  
|                                                                                           |  |                    |         |   |         |   |       |             |  |   |         |  
|                                                                                           |  | (In millions)      |        
|Estimated net fair value of financial instruments exposed to
    changes in interest rates |  | $                  | (10,622 | ) |         | $ | 4,562 |             |  | $ | (2,961  | ) |  | $ | 3,896 |  
|Impact of a 10% adverse change in rates                                                    |  |                    | (546    | ) |         |   | (110  | )           |  |   | (546    | ) |  |   | (95   | )

92



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Impact of Changes in Interest Rates on the Net Value of
    the Companys Interest Rate-Sensitive Financial
    Instruments



option-pricing cash-flow


93



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|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |      |      |      |  
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | -------------------------- | ------------------------------------------------------------------------- | ------ | ---- | --- | --- | ---- | --- | --- | ---- | ---- | ---- | --- | ---- | ---- | ---- | ---- | -
|                                                                                                  |                                                                  | Change in Fair Value as of |                                                                          
|                                                                                                  |                                                                  | December 31, 2006          |                                                                          
|                                                                                                  |                                                                  |                            |                                                                          
|Change in Interest Rate (basis points)                                                            |                                                                  | -100                       |                                                                           |        | -50  |     |     | +50  |     |     | +100 |     
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  |                                                                  | (In millions)              |                                                                          
|Mortgage servicing rights and other financial instruments:                                        |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |     
|                                                                                                  | Mortgage servicing rights and interests from our securitizations |                            | $                                                                         | (1,251 | )    |     | $   | (584 | )   |     | $    | 405  |      |     | $    | 656  |     
|                                                                                                  | Impact of servicing hedge:                                       |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |      |     
|                                                                                                  |                                                                  | Swap  based               |                                                                           |        | 652  |     |     |      | 291 |     |      |      | (211 | )   |      |      | (356 | )   
|                                                                                                  |                                                                  | Treasury-based             |                                                                           |        | 117  |     |     |      | 57  |     |      |      | (54  | )   |      |      | (106 | )   
|                                                                                                  |                                                                  | Others                     |                                                                           |        | 415  |     |     |      | 200 |     |      |      | (193 | )   |      |      | (381 | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  |                                                                  |                            | Mortgage servicing rights and interests from our
    securitizations, net |        |      | (67 | )   |      |     | (36 | )    |      |      | (53 | )    |      |      | (187 | )
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  | Committed pipeline                                               |                            |                                                                           | 44     |      |     |     | 30   |     |     |      | (55  | )    |     |      | (131 | )   
|                                                                                                  | Mortgage loan inventory                                          |                            |                                                                           | 263    |      |     |     | 141  |     |     |      | (169 | )    |     |      | (372 | )   
|                                                                                                  | Impact of associated derivative instruments:                     |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |      |     
|                                                                                                  |                                                                  | Mortgage-based             |                                                                           |        | (104 | )   |     |      | (63 | )   |      |      | 88   |     |      |      | 198  |     
|                                                                                                  |                                                                  | Eurodollar-based           |                                                                           |        | (21  | )   |     |      | (10 | )   |      |      | 10   |     |      |      | 21   |     
|                                                                                                  |                                                                  | Others                     |                                                                           |        | (145 | )   |     |      | (78 | )   |      |      | 90   |     |      |      | 191  |     
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  |                                                                  |                            | Committed pipeline and mortgage loan inventory, net                       |        |      | 37  |     |      |     | 20  |      |      |      | (36 | )    |      |      | (93  | )
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|Net change in fair value related to other businesses                                              |                                                                  |                            | 2                                                                         |        |      |     | 1   |      |     |     | (1   | )    |      |     | (4   | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|GMAC Bank (mortgage division only):                                                               |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |     
|                                                                                                  | Securities portfolio                                             |                            |                                                                           | 2      |      |     |     | 1    |     |     |      | (1   | )    |     |      | (2   | )   
|                                                                                                  | Mortgage loans                                                   |                            |                                                                           | 152    |      |     |     | 92   |     |     |      | (113 | )    |     |      | (242 | )   
|                                                                                                  | Deposit liabilities                                              |                            |                                                                           | (11    | )    |     |     | (5   | )   |     |      | 5    |      |     |      | 10   |     
|                                                                                                  | Federal Home Loan Bank advances                                  |                            |                                                                           | (185   | )    |     |     | (95  | )   |     |      | 101  |      |     |      | 207  |     
|                                                                                                  | Other liabilities                                                |                            |                                                                           | (18    | )    |     |     | (9   | )   |     |      | 9    |      |     |      | 18   |     
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  |                                                                  | GMAC Bank, net             |                                                                           |        | (60  | )   |     |      | (16 | )   |      |      | 1    |     |      |      | (9   | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  | Notes payable and capital securities                             |                            |                                                                           | (279   | )    |     |     | (138 | )   |     |      | 134  |      |     |      | 265  |     
|                                                                                                  | Impact of associated derivative instruments:                     |                            |                                                                           |        |      |     |     |      |     |     |      |      |      |     |      |      |     
|                                                                                                  |                                                                  | Swap-based                 |                                                                           |        | 310  |     |     |      | 153 |     |      |      | (149 | )   |      |      | (295 | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|                                                                                                  |                                                                  |                            | Notes payable and capital securities, net                                 |        |      | 31  |     |      |     | 15  |      |      |      | (15 | )    |      |      | (30  | )
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|Insurance company investment portfolios                                                           |                                                                  |                            | 3                                                                         |        |      |     | 1   |      |     |     | (1   | )    |      |     | (3   | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|Net change in fair value related to mortgage servicing rights
    and other financial instruments |                                                                  | $                          | (54                                                                       | )      |      | $   | (15 | )    |     | $   | (105 | )    |      | $   | (326 | )   
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     
|Net change in fair value related to broker-dealer
    trading securities                          |                                                                  | $                          | (4                                                                        | )      |      | $   | (2  | )    |     | $   | 1    |      |      | $   | 1    |     
|                                                                                                  |                                                                  |                            |                                                                           |        |      |     |     |      |     |     |      |     

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|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |      |      |      |  
|------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------------------------- | ---- | ---- | --- | --- | ---- | ---- | --- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | -
|                                                                                                  |                                                                  | Change in Fair Value as of                |                                                                          
|                                                                                                  |                                                                  | December 31, 2005                         |                                                                          
|                                                                                                  |                                                                  |                                           |                                                                          
|Change in Interest Rate (basis points)                                                            |                                                                  | -100                                      |                                                                           |      | -50  |     |     | +50  |      |     | +100 |     
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  |                                                                  | (In millions)                             |                                                                          
|Mortgage servicing rights and other financial instruments:                                        |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |     
|                                                                                                  | Mortgage servicing rights and interests from our securitizations |                                           | $                                                                         | (919 | )    |     | $   | (381 | )    |     | $    | 268  |      |      | $    | 451  |     
|                                                                                                  | Impact of servicing hedge:                                       |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |      |     
|                                                                                                  |                                                                  | Swap  based                              |                                                                           |      | 568  |     |     |      | 253  |     |      |      | (191 | )    |      |      | (328 | )   
|                                                                                                  |                                                                  | Treasury-based                            |                                                                           |      | 177  |     |     |      | 86   |     |      |      | (82  | )    |      |      | (159 | )   
|                                                                                                  |                                                                  | Others                                    |                                                                           |      | 438  |     |     |      | 223  |     |      |      | (226 | )    |      |      | (459 | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  |                                                                  |                                           | Mortgage servicing rights and interests from our
    securitizations, net |      |      | 264 |     |      |      | 181 |      |      |      | (231 | )    |      |      | (495 | )
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  | Committed pipeline                                               |                                           |                                                                           | 33   |      |     |     | 22   |      |     |      | (43  | )    |      |      | (113 | )   
|                                                                                                  | Mortgage loan inventory                                          |                                           |                                                                           | 340  |      |     |     | 201  |      |     |      | (199 | )    |      |      | (441 | )   
|                                                                                                  | Impact of associated derivative instruments:                     |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |      |     
|                                                                                                  |                                                                  | Mortgage-based                            |                                                                           |      | (92  | )   |     |      | (57  | )   |      |      | 93   |      |      |      | 227  |     
|                                                                                                  |                                                                  | Eurodollar-based                          |                                                                           |      | (35  | )   |     |      | (17  | )   |      |      | 17   |      |      |      | 35   |     
|                                                                                                  |                                                                  | Others                                    |                                                                           |      | (205 | )   |     |      | (108 | )   |      |      | 117  |      |      |      | 240  |     
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  |                                                                  |                                           | Committed pipeline and mortgage loan inventory, net                       |      |      | 41  |     |      |      | 41  |      |      |      | (15  | )    |      |      | (52  | )
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|Net change in fair value related to other businesses                                              |                                                                  |                                           | 4                                                                         |      |      |     | 2   |      |      |     | (3   | )    |      |      | (7   | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|GMAC Bank:                                                                                        |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |     
|                                                                                                  | Securities portfolio                                             |                                           |                                                                           | 2    |      |     |     | 1    |      |     |      | (1   | )    |      |      | (1   | )   
|                                                                                                  | Mortgage loans                                                   |                                           |                                                                           | 107  |      |     |     | 61   |      |     |      | (72  | )    |      |      | (150 | )   
|                                                                                                  | Deposit liabilities                                              |                                           |                                                                           | (5   | )    |     |     | (3   | )    |     |      | 3    |      |      |      | 5    |     
|                                                                                                  | Federal Home Loan Bank advances                                  |                                           |                                                                           | (87  | )    |     |     | (44  | )    |     |      | 45   |      |      |      | 91   |     
|                                                                                                  | Other liabilities                                                |                                           |                                                                           | (24  | )    |     |     | (12  | )    |     |      | 12   |      |      |      | 25   |     
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  |                                                                  | GMAC Bank, net                            |                                                                           |      | (7   | )   |     |      | 3    |     |      |      | (13  | )    |      |      | (30  | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  | Notes payable and capital securities                             |                                           |                                                                           | (159 | )    |     |     | (78  | )    |     |      | 76   |      |      |      | 150  |     
|                                                                                                  | Impact of associated derivative instruments:                     |                                           |                                                                           |      |      |     |     |      |      |     |      |      |      |      |      |      |     
|                                                                                                  |                                                                  | Swap-based                                |                                                                           |      | 163  |     |     |      | 81   |     |      |      | (79  | )    |      |      | (155 | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  |                                                                  | Notes payable and capital securities, net |                                                                           |      | 4    |     |     |      | 3    |     |      |      | (3   | )    |      |      | (5   | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|                                                                                                  | Insurance company investment portfolios                          |                                           |                                                                           | 3    |      |     |     | 1    |      |     |      | (1   | )    |      |      | (3   | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|Net change in fair value related to mortgage servicing rights
    and other financial instruments |                                                                  | $                                         | 309                                                                       |      |      | $   | 231 |      |      | $   | (266 | )    |      | $    | (592 | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     
|Net change in fair value related to broker-dealer
    trading securities                          |                                                                  | $                                         | 1                                                                         |      |      | $   | 1   |      |      | $   |     |      |      | $    | (1   | )   
|                                                                                                  |                                                                  |                                           |                                                                           |      |      |     |     |      |      |     |      |     



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Item 8.     FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA.





STATEMENT OF RESPONSIBILITY FOR PREPARATION


OF FINANCIAL STATEMENTS








|                        |  |                        
|----------------------- |  | -----------------------
|/s/ Bruce J. Paradis    |  | /s/ James R. Giertz    
|                        |  |                        
|Bruce J. Paradis        |  | James R. Giertz        
|Chief Executive Officer |  | Chief Financial Officer
|March 9, 2007           |  | March 9, 2007          

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MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING








Internal Control-Integrated Framework






|                        |  |                        
|----------------------- |  | -----------------------
|/s/ Bruce J. Paradis    |  | /s/ James R. Giertz    
|                        |  |                        
|Bruce J. Paradis        |  | James R. Giertz        
|Chief Executive Officer |  | Chief Financial Officer
|March 9, 2007           |  | March 9, 2007          

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Consolidated financial statements and financial statement
schedules




Internal control over financial reporting


Internal Control 
Integrated Framework




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PricewaterhouseCoopers
LLP






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RESIDENTIAL CAPITAL, LLC





CONSOLIDATED BALANCE SHEET


December 31, 2006 and 2005


|                                                                                                        |                                                    |                        |             |            |             |   |             |            |             | 
|------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | ---------------------- | ----------- | ---------- | ----------- | - | ----------- | ---------- | ----------- | 
|                                                                                                        |                                                    | 2006                   |             |            | 2005        |  
|                                                                                                        |                                                    |                        |             |            |             |  
|                                                                                                        |                                                    | (Dollars in thousands) |            
|ASSETS                                                                                                 
|Cash and cash equivalents                                                                               |                                                    | $                      | 2,018,847   |            |             | $ | 2,266,753   |           
|Mortgage loans held for sale                                                                            |                                                    |                        | 27,007,382  |            |             |   | 19,521,566  |           
|Trading securities                                                                                      |                                                    |                        | 4,562,073   |            |             |   | 3,896,008   |           
|Available for sale securities                                                                           |                                                    |                        | 229,469     |            |             |   | 1,068,937   |           
|Mortgage loans held for investment, net                                                                 |                                                    |                        | 67,927,951  |            |             |   | 67,892,660  |           
|Lending receivables, net                                                                                |                                                    |                        | 14,530,104  |            |             |   | 13,401,047  |           
|Mortgage servicing rights                                                                               |                                                    |                        | 4,930,061   |            |             |   | 4,015,015   |           
|Accounts receivable                                                                                     |                                                    |                        | 2,561,200   |            |             |   | 1,951,210   |           
|Investments in real estate and other                                                                    |                                                    |                        | 2,622,149   |            |             |   | 1,855,298   |           
|Goodwill                                                                                                |                                                    |                        | 471,463     |            |             |   | 459,768     |           
|Other assets                                                                                            |                                                    |                        | 8,726,120   |            |             |   | 2,556,830   |           
|                                                                                                        |                                                    |                        |             |            |             |  
|Total assets                                                                                            |                                                    | $                      | 135,586,819 |            |             | $ | 118,885,092 |           
|                                                                                                        |                                                    |                        |             |            |             |  
|                                                                                                       
|LIABILITIES                                                                                            
|Borrowings:                                                                                             |                                                    |                        |             |            |             |   |             |           
|                                                                                                        | Affiliate borrowings                               |                        | $           |           |             |   | $           | 5,177,462  |            
|                                                                                                        | Collateralized borrowings in securitization trusts |                        |             | 53,299,518 |             |   |             | 56,097,801 |            
|                                                                                                        | Other borrowings                                   |                        |             | 59,880,378 |             |   |             | 42,300,507 |            
|                                                                                                        |                                                    |                        |             |            |             |  
|                                                                                                        |                                                    | Total borrowings       |             |            | 113,179,896 |   |             |            | 103,575,770 | 
|Deposit liabilities                                                                                     |                                                    |                        | 9,851,026   |            |             |   | 4,123,304   |           
|Other liabilities                                                                                       |                                                    |                        | 4,374,006   |            |             |   | 3,722,048   |           
|                                                                                                        |                                                    |                        |             |            |             |  
|Total liabilities                                                                                       |                                                    |                        | 127,404,928 |            |             |   | 111,421,122 |           
|Minority interest                                                                                       |                                                    |                        | 559,778     |            |             |   |            |           
|                                                                                                       
|EQUITY                                                                                                 
|Common stock, $0.01 par value (1,000 shares authorized, issued
    and outstanding) and paid-in capital |                                                    |                        |            |            |             |   | 3,367,677   |           
|Members interest                                                                                       |                                                    |                        | 3,837,943   |            |             |   |            |           
|Retained earnings                                                                                       |                                                    |                        | 3,651,935   |            |             |   | 3,980,587   |           
|Accumulated other comprehensive income                                                                  |                                                    |                        | 132,235     |            |             |   | 115,706     |           
|                                                                                                        |                                                    |                        |             |            |             |  
|Total equity                                                                                            |                                                    |                        | 7,622,113   |            |             |   | 7,463,970   |           
|                                                                                                        |                                                    |                        |             |            |             |  
|Total liabilities, minority interest and equity                                                         |                                                    | $                      | 135,586,819 |            |             | $ | 118,885,092 |           
|                                                                                                        |                                                    |                        |             |            |             |  



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RESIDENTIAL CAPITAL, LLC





CONSOLIDATED STATEMENT OF INCOME


Years Ended December 31, 2006, 2005, and 2004


|                                                                 |  |                        |            |   |      |   |           |      |  |   |            |  
|---------------------------------------------------------------- |  | ---------------------- | ---------- | - | ---- | - | --------- | ---- |  | - | ---------- | -
|                                                                 |  | 2006                   |            |   | 2005 |   |           | 2004 | 
|                                                                 |  |                        |            |   |      |   |           |      | 
|                                                                 |  | (Dollars in thousands) |           
|Revenue                                                          |  |                        |            |   |      |   |           |      |  |   |            |  
|Interest income                                                  |  | $                      | 8,169,034  |   |      | $ | 5,797,097 |      |  | $ | 4,990,881  |  
|Interest expense                                                 |  |                        | 6,460,220  |   |      |   | 3,872,102 |      |  |   | 2,404,982  |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Net interest income                                              |  |                        | 1,708,814  |   |      |   | 1,924,995 |      |  |   | 2,585,899  |  
|Provision for loan losses                                        |  |                        | 1,334,084  |   |      |   | 651,796   |      |  |   | 842,899    |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Net interest income after provision for loan losses              |  |                        | 374,730    |   |      |   | 1,273,199 |      |  |   | 1,743,000  |  
|Gain on sale of mortgage loans, net                              |  |                        | 890,216    |   |      |   | 1,036,669 |      |  |   | 696,903    |  
|Servicing fees                                                   |  |                        | 1,583,674  |   |      |   | 1,416,280 |      |  |   | 1,294,256  |  
|Amortization and impairment of servicing rights                  |  |                        |           |   |      |   | (761,988  | )    |  |   | (1,003,265 | )
|Servicing asset valuation and hedge activities, net              |  |                        | (1,100,232 | ) |      |   | 17,186    |      |  |   | 214,911    |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Net servicing fees                                               |  |                        | 483,442    |   |      |   | 671,478   |      |  |   | 505,902    |  
|Gain on investment securities, net                               |  |                        | 68,665     |   |      |   | 236,362   |      |  |   | 63,703     |  
|Real estate related revenues                                     |  |                        | 593,040    |   |      |   | 707,961   |      |  |   | 621,880    |  
|Gain on sale of equity investments                               |  |                        | 414,508    |   |      |   | 4,213     |      |  |   | 27,359     |  
|Other income                                                     |  |                        | 197,908    |   |      |   | 305,378   |      |  |   | 307,979    |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Total net revenue                                                |  |                        | 3,022,509  |   |      |   | 4,235,260 |      |  |   | 3,966,726  |  
|Expenses                                                         |  |                        |            |   |      |   |           |      |  |   |            |  
|Compensation and benefits                                        |  |                        | 1,206,339  |   |      |   | 1,406,930 |      |  |   | 1,216,537  |  
|Professional fees                                                |  |                        | 273,056    |   |      |   | 212,410   |      |  |   | 224,716    |  
|Data processing and telecommunications                           |  |                        | 189,152    |   |      |   | 199,849   |      |  |   | 191,076    |  
|Advertising                                                      |  |                        | 152,792    |   |      |   | 158,688   |      |  |   | 151,345    |  
|Occupancy                                                        |  |                        | 137,687    |   |      |   | 121,301   |      |  |   | 107,565    |  
|Other                                                            |  |                        | 637,909    |   |      |   | 509,156   |      |  |   | 465,135    |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Total expenses                                                   |  |                        | 2,596,935  |   |      |   | 2,608,334 |      |  |   | 2,356,374  |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Income before income tax expense (benefit) and minority interest |  |                        | 425,574    |   |      |   | 1,626,926 |      |  |   | 1,610,352  |  
|Income tax expense (benefit)                                     |  |                        | (289,173   | ) |      |   | 606,300   |      |  |   | 642,140    |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Income before minority interest                                  |  |                        | 714,747    |   |      |   | 1,020,626 |      |  |   | 968,212    |  
|Minority interest                                                |  |                        | 9,654      |   |      |   |          |      |  |   |           |  
|                                                                 |  |                        |            |   |      |   |           |      | 
|Net income                                                       |  | $                      | 705,093    |   |      | $ | 1,020,626 |      |  | $ | 968,212    |  
|                                                                 |  |                        |            |   |      |   |           |      | 



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RESIDENTIAL CAPITAL, LLC





CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Years Ended December 31, 2006, 2005, and 2004


|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |   |         |         |        |   |           |            |         |  
|---------------------------- | ------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | --------- | ---------- | -------- | - | --------- | --------- | - | - | ------------- | ---------- | ------- | ------------- | - | --------- | ------------ | - | ------- | ------- | ------ | - | --------- | ---------- | ------- | -
|                             |                                                                                            | Common                                                                                          |           |            |          |   |           |           |   |   | Accumulated   |            |         |              
|                             |                                                                                            | Stock and                                                                                       |           |            |          |   |           |           |   |   | Other         |            |         |              
|                             |                                                                                            | Paid-in                                                                                         |           |            | Members |   |           | Retained  |   |   | Comprehensive |            |         | Comprehensive |   |           |             
|                             |                                                                                            | Capital                                                                                         |           |            | Interest |   |           | Earnings  |   |   | Income        |            |         | Income        |   |           | Total Equity |  
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             |                                                                                            | (Dollars in thousands)                                                                          |           |            |         
|Balance at January 1, 2004   |                                                                                            | $                                                                                               | 1,193,592 |            |          | $ |           |           |   | $ | 1,991,749     |            |         |               |   |           |              | $ | 666     |         |        | $ | 3,186,007 |           
|                             | Net income                                                                                 |                                                                                                 |           |           |          |   |           |           |   |   |               | 968,212    |         |               | $ | 968,212   |              |   |         |        |        |   |           | 968,212    |        
|                             | Capital contribution                                                                       |                                                                                                 |           | 53,186     |          |   |           |           |   |   |               |           |         |               |   |          |              |   |         |        |        |   |           | 53,186     |        
|                             | Other comprehensive income, net of tax:                                                    |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |   |         |         |        |   |           |            |        
|                             |                                                                                            | Unrealized gain on investment securities                                                        |           |            |         |   |           |           |   |   |               |            |        |               |   |           | 10,432       |   |         |         |       |   |           |            | 10,432  |  
|                             |                                                                                            | Foreign currency translation adjustment                                                         |           |            |         |   |           |           |   |   |               |            |        |               |   |           | 21,109       |   |         |         |       |   |           |            | 21,109  |  
|                             |                                                                                            | Unrealized gain on cash flow hedges                                                             |           |            |         |   |           |           |   |   |               |            |        |               |   |           | 126,799      |   |         |         |       |   |           |            | 126,799 |  
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Other comprehensive income                                                                 |                                                                                                 |           |           |          |   |           |           |   |   |               |           |         |               |   | 158,340   |              |   |         | 158,340 |        |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Comprehensive income                                                                       |                                                                                                 |           |           |          |   |           |           |   |   |               |           |         |               | $ | 1,126,552 |              |   |         |        |        |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|Balance at December 31, 2004 |                                                                                            |                                                                                                 | 1,246,778 |            |          |   |           |           |   |   | 2,959,961     |            |         |               |   |           |              |   | 159,006 |         |        |   | 4,365,745 |           
|                             | Net income                                                                                 |                                                                                                 |           |           |          |   |           |           |   |   |               | 1,020,626  |         |               | $ | 1,020,626 |              |   |         |        |        |   |           | 1,020,626  |        
|                             | Capital contributions                                                                      |                                                                                                 |           | 2,120,899  |          |   |           |           |   |   |               |           |         |               |   |          |              |   |         |        |        |   |           | 2,120,899  |        
|                             | Other comprehensive income, net of tax:                                                    |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |   |         |         |        |   |           |            |        
|                             |                                                                                            | Unrealized loss on investment securities                                                        |           |            |         |   |           |           |   |   |               |            |        |               |   |           | (24,451      | ) |         |         |       |   |           |            | (24,451 | )
|                             |                                                                                            | Foreign currency translation adjustment                                                         |           |            |         |   |           |           |   |   |               |            |        |               |   |           | (33,103      | ) |         |         |       |   |           |            | (33,103 | )
|                             |                                                                                            | Unrealized gain on cash flow hedges                                                             |           |            |         |   |           |           |   |   |               |            |        |               |   |           | 14,254       |   |         |         |       |   |           |            | 14,254  |  
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Other comprehensive income                                                                 |                                                                                                 |           |           |          |   |           |           |   |   |               |           |         |               |   | (43,300   | )            |   |         | (43,300 | )      |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Comprehensive income                                                                       |                                                                                                 |           |           |          |   |           |           |   |   |               |           |         |               | $ | 977,326   |              |   |         |        |        |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|Balance at December 31, 2005 |                                                                                            |                                                                                                 | 3,367,677 |            |          |   |          |           |   |   | 3,980,587     |            |         |               |   |           |              |   | 115,706 |         |        |   | 7,463,970 |           
|                             | Cumulative effect of change in accounting principle as of
    January 1, 2006, net of tax: |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |   |         |         |        |   |           |            |        
|                             |                                                                                            | Transfer of unrealized loss for certain available for sale
    securities to trading securities |           |            |         |   |           |           |  |   |               |            | (16,717 | )             |   | $         |             |   |         |         | 16,717 |   |           |            |        |  
|                             |                                                                                            | Recognize mortgage servicing rights at fair value                                               |           |            |         |   |           |           |  |   |               |            | 3,850   |               |   |           | 3,850        |   |         |         |       |   |           |            | 3,850   |  
|                             | Net income                                                                                 |                                                                                                 |           |           |          |   |           |          |   |   |               | 705,093    |         |               |   | 705,093   |              |   |         |        |        |   |           | 705,093    |        
|                             | Capital contributions                                                                      |                                                                                                 |           | 101,429    |          |   |           | 368,837   |   |   |               |           |         |               |   |          |              |   |         |        |        |   |           | 470,266    |        
|                             | Conversion of common stock to members interest on
    October 24, 2006                    |                                                                                                 |           | (3,469,106 | )        |   |           | 3,469,106 |   |   |               |           |         |               |   |          |              |   |         |        |        |   |           |           |        
|                             | Dividends                                                                                  |                                                                                                 |           |            |          |   |           |           |   |   |               | (1,020,878 | )       |               |   |          |              |   |         |        |        |   |           | (1,020,878 | )      
|                             | Other comprehensive income, net of tax:                                                    |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |   |         |         |        |   |           |            |        
|                             |                                                                                            | Unrealized gain on available for sale securities                                                |           |            |         |   |           |           |  |   |               |            |        |               |   |           | 1,738        |   |         |         |       |   |           |            | 1,738   |  
|                             |                                                                                            | Foreign currency translation adjustment                                                         |           |            |         |   |           |           |  |   |               |            |        |               |   |           | 49,225       |   |         |         |       |   |           |            | 49,225  |  
|                             |                                                                                            | Unrealized loss on cash flow hedges                                                             |           |            |         |   |           |           |  |   |               |            |        |               |   |           | (51,151      | ) |         |         |       |   |           |            | (51,151 | )
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Other comprehensive income                                                                 |                                                                                                 |           |           |          |   |           |          |   |   |               |           |         |               |   | (188      | )            |   |         | (188    | )      |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|                             | Comprehensive income                                                                       |                                                                                                 |           |           |          |   |           |          |   |   |               |           |         |               | $ | 708,755   |              |   |         |        |        |   |           |           |        
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  
|Balance at December 31, 2006 |                                                                                            | $                                                                                               |          |            |          | $ | 3,837,943 |           |   | $ | 3,651,935     |            |         |               |   |           |              | $ | 132,235 |         |        | $ | 7,622,113 |           
|                             |                                                                                            |                                                                                                 |           |            |          |   |           |           |   |   |               |            |         |               |   |           |              |  



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RESIDENTIAL CAPITAL, LLC





CONSOLIDATED STATEMENT OF CASH FLOWS


Years Ended December 31, 2006, 2005, and 2004


|                                                                                         |                                                          |                                                     |              |           |             |   |              |            |             |   |              |           |             |  
|---------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | ------------ | --------- | ----------- | - | ------------ | ---------- | ----------- | - | ------------ | --------- | ----------- | -
|                                                                                         |                                                          | 2006                                                |              |           | 2005        |   |              | 2004       |            
|                                                                                         |                                                          |                                                     |              |           |             |   |              |            |            
|                                                                                         |                                                          | (Dollars in thousands)                              |             
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |                                                          |                                                     |              |           |             |   |              |            |             |   |              |          
|Net income                                                                               |                                                          | $                                                   | 705,093      |           |             | $ | 1,020,626    |            |             | $ | 968,212      |          
|Reconciliation of net income to net cash provided by (used in)
    operating activities: |                                                          |                                                     |              |           |             |   |              |            |             |   |              |          
|                                                                                         | Amortization and impairment of mortgage servicing rights |                                                     |              |          |             |   |              | 761,988    |             |   |              | 1,003,265 |            
|                                                                                         | Depreciation and amortization                            |                                                     |              | 665,774   |             |   |              | 605,579    |             |   |              | 528,681   |            
|                                                                                         | Provision for loan losses                                |                                                     |              | 1,334,084 |             |   |              | 651,796    |             |   |              | 842,899   |            
|                                                                                         | Gain on sale of mortgage loans, net                      |                                                     |              | (890,216  | )           |   |              | (1,036,669 | )           |   |              | (696,903  | )          
|                                                                                         | Gain on sale of equity investments                       |                                                     |              | (414,508  | )           |   |              | (4,213     | )           |   |              | (27,359   | )          
|                                                                                         | Net (gain) loss on sale of other assets                  |                                                     |              | 17,262    |             |   |              | (41,559    | )           |   |              | (39,700   | )          
|                                                                                         | Pension curtailment gain                                 |                                                     |              | (42,630   | )           |   |              |           |             |   |              |          |            
|                                                                                         | Minority interest                                        |                                                     |              | 9,654     |             |   |              |           |             |   |              |          |            
|Gain on investment securities, net                                                       |                                                          |                                                     | (68,665      | )         |             |   | (236,362     | )          |             |   | (63,703      | )        
|Equity in earnings of investees in excess of cash received                               |                                                          |                                                     | (85,445      | )         |             |   | (137,671     | )          |             |   | (141,574     | )        
|(Gain) loss on valuation of mortgage servicing rights                                    |                                                          |                                                     | 819,353      |           |             |   | (86,328      | )          |             |   | 299,522      |          
|Originations and purchases of mortgage loans held for sale                               |                                                          |                                                     | (176,541,708 | )         |             |   | (159,280,861 | )          |             |   | (117,339,636 | )        
|Proceeds from sales and repayments of mortgage loans held for
    sale                   |                                                          |                                                     | 156,424,705  |           |             |   | 133,222,847  |            |             |   | 114,982,130  |          
|Deferred income tax                                                                      |                                                          |                                                     | (345,444     | )         |             |   | 226,526      |            |             |   | 882,104      |          
|Net change in:                                                                           |                                                          |                                                     |              |           |             |   |              |            |             |   |              |          
|                                                                                         |                                                          | Trading securities                                  |              |           | 298,856     |   |              |            | (952,969    | ) |              |           | 707,629     |  
|                                                                                         |                                                          | Accounts receivable                                 |              |           | (647,150    | ) |              |            | 152,081     |   |              |           | (568,644    | )
|                                                                                         |                                                          | Other assets                                        |              |           | (1,356,070  | ) |              |            | (344,510    | ) |              |           | 255,974     |  
|                                                                                         |                                                          | Other liabilities                                   |              |           | 13,383      |   |              |            | (667,417    | ) |              |           | 104,496     |  
|                                                                                         |                                                          |                                                     |              |           |             |   |              |            |            
|                                                                                         |                                                          | Net cash provided by (used in) operating activities |              |           | (20,103,672 | ) |              |            | (26,147,116 | ) |              |           | 1,697,393   |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |                                                          |                                                     |              |           |             |   |              |            |             |   |              |          
|Net increase in lending receivables                                                      |                                                          |                                                     | (1,200,420   | )         |             |   | (3,974,763   | )          |             |   | (1,102,164   | )        
|Originations and purchases of mortgage loans held for investment                         |                                                          |                                                     | (15,318,790  | )         |             |   | (20,081,860  | )          |             |   | (38,400,806  | )        
|Proceeds from sales and repayments of mortgage loans held for
    investment             |                                                          |                                                     | 25,186,643   |           |             |   | 27,528,658   |            |             |   | 25,095,202   |          
|Purchases of available for sale securities                                               |                                                          |                                                     | (54,273      | )         |             |   | (598,613     | )          |             |   | (1,165,083   | )        
|Proceeds from sales and repayments of available for sale
    securities                  |                                                          |                                                     | 24,328       |           |             |   | 747,215      |            |             |   | 24,775       |          
|Additions to mortgage servicing rights                                                   |                                                          |                                                     | (11,780      | )         |             |   | (266,589     | )          |             |   | (241,515     | )        
|Sales of mortgage servicing rights                                                       |                                                          |                                                     |             |           |             |   | 207,591      |            |             |   |             |          
|Purchase of and advances to investments in real estate and other                         |                                                          |                                                     | (1,695,102   | )         |             |   | (1,249,253   | )          |             |   | (883,840     | )        
|Proceeds from sales of and returns of investments in real estate
    and other           |                                                          |                                                     | 1,378,210    |           |             |   | 923,924      |            |             |   | 773,377      |          
|Consolidation of IB Finance Holding Company LLC                                          |                                                          |                                                     | 251,347      |           |             |   |             |            |             |   |             |          
|Acquisitions, net of cash acquired                                                       |                                                          |                                                     | (2,551       | )         |             |   | (3,988       | )          |             |   | (11,764      | )        
|Other, net                                                                               |                                                          |                                                     | 981,459      |           |             |   | 724,699      |            |             |   | 209,096      |          
|                                                                                         |                                                          |                                                     |              |           |             |   |              |            |            
|                                                                                         |                                                          | Net cash provided by (used in) investing activities |              |           | 9,539,071   |   |              |            | 3,957,021   |   |              |           | (15,702,722 | )
|(Continued on next page)                                                                

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RESIDENTIAL CAPITAL, LLC


CONSOLIDATED STATEMENT OF CASH FLOWS


Years Ended December 31, 2006, 2005, and
2004  (Continued)


|                                                                                 |                                           |                        |             |            |      |   |             |            |  |   |             |            | 
|-------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------- | ----------- | ---------- | ---- | - | ----------- | ---------- |  | - | ----------- | ---------- | 
|                                                                                 |                                           | 2006                   |             |            | 2005 |   |             | 2004       | 
|                                                                                 |                                           |                        |             |            |      |   |             |            | 
|                                                                                 |                                           | (Dollars in thousands) |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |                                           |                        |             |            |      |   |             |            |  |   |             |           
|Net decrease in affiliate borrowings                                             |                                           | $                      | (5,177,462  | )          |      | $ | (2,828,433  | )          |  | $ | (677,633    | )         
|Net increase in other short-term borrowings                                      |                                           |                        | 2,730,803   |            |      |   | 4,242,935   |            |  |   | 2,988,692   |           
|Proceeds from issuance of collateralized borrowings in
    securitization trusts |                                           |                        | 19,317,561  |            |      |   | 28,361,997  |            |  |   | 28,804,811  |           
|Repayments of collateralized borrowings in securitization trusts                 |                                           |                        | (22,605,088 | )          |      |   | (22,682,856 | )          |  |   | (17,498,926 | )         
|Proceeds from secured aggregation facilities, long-term                          |                                           |                        | 29,071,067  |            |      |   | 7,896,054   |            |  |   |            |           
|Repayments of secured aggregation facilities, long-term                          |                                           |                        | (27,942,989 | )          |      |   | (3,157,448  | )          |  |   |            |           
|Proceeds from other long-term borrowings                                         |                                           |                        | 14,298,047  |            |      |   | 9,625,279   |            |  |   | 269,000     |           
|Repayments of other long-term borrowings                                         |                                           |                        | (568,430    | )          |      |   | (210,000    | )          |  |   | (220,000    | )         
|Payments of debt issuance costs                                                  |                                           |                        | (109,680    | )          |      |   | (121,413    | )          |  |   | (102,618    | )         
|Dividends paid                                                                   |                                           |                        | (580,752    | )          |      |   |            |            |  |   |            |           
|Increase in deposit liabilities                                                  |                                           |                        | 1,742,878   |            |      |   | 2,458,334   |            |  |   | 383,515     |           
|                                                                                 |                                           |                        |             |            |      |   |             |            | 
|                                                                                 | Net cash provided by financing activities |                        |             | 10,175,955 |      |   |             | 23,584,449 |  |   |             | 13,946,841 | 
|Effect of foreign exchange rates on cash and cash equivalents                    |                                           |                        | 140,740     |            |      |   | (26,684     | )          |  |   | 16,478      |           
|                                                                                 |                                           |                        |             |            |      |   |             |            | 
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             |                                           |                        | (247,906    | )          |      |   | 1,367,670   |            |  |   | (42,010     | )         
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                   |                                           |                        | 2,266,753   |            |      |   | 899,083     |            |  |   | 941,093     |           
|                                                                                 |                                           |                        |             |            |      |   |             |            | 
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                         |                                           | $                      | 2,018,847   |            |      | $ | 2,266,753   |            |  | $ | 899,083     |           
|                                                                                 |                                           |                        |             |            |      |   |             |            | 
|(Continued on next page)                                                        

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RESIDENTIAL CAPITAL, LLC


CONSOLIDATED STATEMENT OF CASH FLOWS


Years Ended December 31, 2006, 2005, and
2004  (Continued)


|                                                                                                                                           |  |                        |              |   |      |   |              |      |  |   |              |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------- | ------------ | - | ---- | - | ------------ | ---- |  | - | ------------ | -
|                                                                                                                                           |  | 2006                   |              |   | 2005 |   |              | 2004 | 
|                                                                                                                                           |  |                        |              |   |      |   |              |      | 
|                                                                                                                                           |  | (Dollars in thousands) |             
|SUPPLEMENTAL DISCLOSURES:                                                                                                                  |  |                        |              |   |      |   |              |      |  |   |              |  
|Interest paid                                                                                                                              |  | $                      | 6,628,857    |   |      | $ | 3,835,316    |      |  | $ | 2,274,131    |  
|Taxes paid                                                                                                                                 |  |                        | 487,626      |   |      |   | 713,321      |      |  |   | 387,255      |  
|Non-cash transactions:                                                                                                                     |  |                        |              |   |      |   |              |      |  |   |              |  
|Available for sale securities transferred to trading securities                                                                            |  |                        | 927,141      |   |      |   |             |      |  |   |             |  
|Mortgage loans held for sale transferred to mortgage loans held
    for investment                                                         |  |                        | 14,549,018   |   |      |   | 19,963,930   |      |  |   | 1,405,355    |  
|Mortgage loans held for investment transferred to mortgage loans
    held for sale                                                         |  |                        | 3,236,630    |   |      |   | 3,904,330    |      |  |   | 3,505,511    |  
|Mortgage loans held for investment transferred to other assets                                                                             |  |                        | 1,762,912    |   |      |   | 930,672      |      |  |   | 387,833      |  
|Originations of mortgage servicing rights from sold loans                                                                                  |  |                        | 1,722,895    |   |      |   | 1,272,126    |      |  |   | 1,227,835    |  
|Capital contributions of lending receivables                                                                                               |  |                        | 139,928      |   |      |   | 120,899      |      |  |   | 53,186       |  
|Capital contribution through forgiveness of affiliate borrowings                                                                           |  |                        |             |   |      |   | 2,000,000    |      |  |   |             |  
|Capital contribution from limited liability company election for
    federal income tax purposes                                           |  |                        | 330,338      |   |      |   |             |      |  |   |             |  
|Dividend due to limited liability company election for federal
    income tax purposes                                                     |  |                        | 433,378      |   |      |   |             |      |  |   |             |  
|Dividend of non-cash assets of the former GMAC Bank                                                                                        |  |                        | 92,550       |   |      |   |             |      |  |   |             |  
|Consolidation of non-cash assets of IB Finance Holding Company
    LLC                                                                     |  |                        | 4,643,219    |   |      |   |             |      |  |   |             |  
|Other disclosures:                                                                                                                         |  |                        |              |   |      |   |              |      |  |   |              |  
|Proceeds from sales and repayments of mortgage loans held for
    investment for mortgage loans originally designated as held for
    sale |  |                        | 7,561,986    |   |      |   | 2,062,975    |      |  |   | 1,550,733    |  
|Reconciliation of mortgage loans held for sale:                                                                                            |  |                        |              |   |      |   |              |      |  |   |              |  
|Mortgage loans held for sale at beginning of year                                                                                          |  | $                      | 19,521,566   |   |      | $ | 14,032,781   |      |  | $ | 11,577,746   |  
|Originations and purchases of mortgage loans held for sale                                                                                 |  |                        | 176,541,708  |   |      |   | 159,280,861  |      |  |   | 117,339,636  |  
|Gain on sale of mortgage loans                                                                                                             |  |                        | 899,108      |   |      |   | 1,045,496    |      |  |   | 772,055      |  
|Proceeds from sales and repayments of mortgage loans held for
    sale                                                                     |  |                        | (156,424,705 | ) |      |   | (133,222,847 | )    |  |   | (114,982,130 | )
|Proceeds from sales and repayments of loans transferred from
    mortgage loans held for investment                                        |  |                        | (1,206,396   | ) |      |   | (4,231,189   | )    |  |   | (1,516,770   | )
|Originations of mortgage servicing rights                                                                                                  |  |                        | (1,722,895   | ) |      |   | (1,272,126   | )    |  |   | (1,227,835   | )
|Transfers to mortgage loans held for investment                                                                                            |  |                        | (14,549,012  | ) |      |   | (19,963,930  | )    |  |   | (1,405,355   | )
|Transfers from mortgage loans held for investment                                                                                          |  |                        | 3,236,630    |   |      |   | 3,904,330    |      |  |   | 3,505,511    |  
|Other                                                                                                                                      |  |                        | 711,378      |   |      |   | (51,810      | )    |  |   | (30,077      | )
|                                                                                                                                           |  |                        |              |   |      |   |              |      | 
|Mortgage loans held for sale at end of year                                                                                                |  | $                      | 27,007,382   |   |      | $ | 19,521,566   |      |  | $ | 14,032,781   |  
|                                                                                                                                           |  |                        |              |   |      |   |              |      | 



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RESIDENTIAL CAPITAL, LLC





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                            
|-- | ---------------------------
|1. | Organization and Operations















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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






|   |                                
|-- | -------------------------------
|2. | Significant Accounting Policies



| |                                        
| | ---------------------------------------
| | Consolidation and Basis of Presentation











| |                                 
| | --------------------------------
| | Use of Estimates and Assumptions





| |                          
| | -------------------------
| | Allowance for Loan Losses

Accounting
by Creditors for Impairment of a Loan Accounting for
Contingencies


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




charged-off




| |                          
| | -------------------------
| | Mortgage Servicing Rights





Accounting for
Servicing of Financial Assets


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)














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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




| |                                                                          
| | -------------------------------------------------------------------------
| | Securitizations and Interests that Continue to be Held by
    the Company

mortgage-backed interest-only principal-only


risk-adjusted


(on-balance off-balance on-balance




| |                          
| | -------------------------
| | Cash and Cash Equivalents



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






| |                             
| | ----------------------------
| | Mortgage Loans Held for Sale





| |                      
| | ---------------------
| | Investment Securities



available-for-sale




| |                                                           
| | ----------------------------------------------------------
| | Mortgage Loans Held for Investment and Lending Receivables



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)










| |                    
| | -------------------
| | Accounts Receivable





| |         
| | --------
| | Goodwill

two-step Disclosures about Segments of an Enterprise and Related
Information


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




| |                  
| | -----------------
| | Foreclosed Assets





| |                       
| | ----------------------
| | Property and Equipment

straight-line straight-line




| |                                              
| | ---------------------------------------------
| | Derivative Instruments and Hedging Activities







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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




| |                 
| | ----------------
| | Loan Commitments





| |                                        
| | ---------------------------------------
| | Liability for Assets Sold with Recourse





| |                         
| | ------------------------
| | Reinsurance Arrangements





| |             
| | ------------
| | Income Taxes







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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




| |                  
| | -----------------
| | Reclassifications





| |                                     
| | ------------------------------------
| | Recently Issued Accounting Standards

Statement of Financial Accounting Standards
No. 155 Accounting for Certain Hybrid Financial Instruments


Financial Accounting Standards Board Staff
Position  FIN 46(R)-6 Determining the
Variability to Be Considered in Applying FASB Interpretation
No. 46(R)


Financial Accounting Standards Board Interpretation
No. 48 Accounting for Uncertainty in
Income Taxes


Staff Accounting Bulletin No. 108 Quantifying Financial Misstatements


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




Statement of Financial Accounting Standards
No. 157 Fair Value Measurements


Statement of Financial Accounting Standards
No. 158 Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans


Statement of Financial Accounting Standards
No. 159 The
Fair Value Option for Financial Assets and Financial Liabilities


3.     Sale of Majority Interest in
GMAC and Related Transactions




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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)












4.     Mortgage Loans Held for
Sale




|                     |  |                |            |  |      |   |            | 
|-------------------- |  | -------------- | ---------- |  | ---- | - | ---------- | 
|December 31,         |  | 2006           |            |  | 2005 |  
|                     |  |                |            |  |      |  
|                     |  | (In thousands) |           
|Prime conforming     |  | $              | 2,171,782  |  |      | $ | 2,876,323  | 
|Prime non-conforming |  |                | 12,606,382 |  |      |   | 9,510,198  | 
|Nonprime             |  |                | 8,548,213  |  |      |   | 4,275,415  | 
|Prime second-lien    |  |                | 2,991,471  |  |      |   | 2,204,647  | 
|Government           |  |                | 689,534    |  |      |   | 654,983    | 
|                     |  |                |            |  |      |  
|Total                |  | $              | 27,007,382 |  |      | $ | 19,521,566 | 
|                     |  |                |            |  |      |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


5.     Trading Securities




|                                     |  |                |           |   |      |   |           | 
|------------------------------------ |  | -------------- | --------- | - | ---- | - | --------- | 
|December 31,                         |  | 2006           |           |   | 2005 |  
|                                     |  |                |           |   |      |  
|                                     |  | (In thousands) |          
|U.S. Treasury securities             |  | $              | 400,962   |   |      | $ | 1,173,792 | 
|Mortgage and asset-backed securities |  |                | 1,748,328 |   |      |   | 1,042,548 | 
|Residual interests                   |  |                | 1,018,895 |   |      |   | 763,713   | 
|Principal-only securities            |  |                | 956,741   |   |      |   | 651,309   | 
|Interest-only securities             |  |                | 369,484   |   |      |   | 264,646   | 
|Other                                |  |                | 67,663    |   |      |   |          | 
|                                     |  |                |           |   |      |  
|Total                                |  | $              | 4,562,073 |   |      | $ | 3,896,008 | 
|                                     |  |                |           |   |      |  
|Net unrealized gains (losses)        |  | $              | (10,118   | ) |      | $ | 131,019   | 
|Pledged as collateral                |  |                | 3,681,269 |   |      |   | 2,721,189 | 

mortgage-backed interest-only principal-only






6.     Available for Sale
Securities




|                      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |       |  |   |         |         |   |   |           |         | 
|--------------------- | ------------------------------- | -------------- | ------- | ---------------- | ----- | - | ----- | ------ |  | - | ---------------- | ------ | - | ---- | ------- | ------- | ----- | - | --------- | ------- |  | - | ----- | ----- |  | - | ------- | ------- | - | - | --------- | ------- | 
|                      |                                 | 2006           |         |                  | 2005  |  
|                      |                                 |                |         |                  |       |  
|                      |                                 |                |         | Gross Unrealized |       |   |       |        |  |   | Gross Unrealized |        |   |     
|                      |                                 |                |         |                  |       |   | Fair  |        |  |   |                  |        |   |      | Fair    |        
|December 31,          |                                 | Cost           |         |                  | Gains |   |       | Losses |  |   | Value            |        |   | Cost |         |         | Gains |   |           | Losses  |  |   | Value |      
|                      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |      
|                      |                                 | (In thousands) |        
|Debt securities:      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |       |  |   |         |         |   |   |           |        
|                      | U.S. Treasury securities        |                | $       |                 |       |   | $     |       |  |   | $                |       |   |      | $       |        |       |   | $         | 952,860 |  |   | $     |      |  |   | $       | (25,719 | ) |   | $         | 927,141 | 
|                      | Mortgage-backed securities      |                |         | 154,080          |       |   |       | 272    |  |   |                  | (2,004 | ) |      |         | 152,348 |       |   |           | 99,113  |  |   |       | 20    |  |   |         | (1,907  | ) |   |           | 97,226  | 
|                      | Interest-only securities(a)     |                |         | 1,260            |       |   |       | 3,794  |  |   |                  |       |   |      |         | 5,054   |       |   |           | 3,031   |  |   |       | 2,240 |  |   |         |        |   |   |           | 5,271   | 
|                      | Principal-only securities       |                |         | 184              |       |   |       | 151    |  |   |                  |       |   |      |         | 335     |       |   |           | 212     |  |   |       | 159   |  |   |         |        |   |   |           | 371     | 
|                      | States & political subdivisions |                |         | 23,800           |       |   |       | 8      |  |   |                  | (247   | ) |      |         | 23,561  |       |   |           | 4,882   |  |   |       |      |  |   |         | (33     | ) |   |           | 4,849   | 
|                      | Other                           |                |         | 47,358           |       |   |       | 210    |  |   |                  | (304   | ) |      |         | 47,264  |       |   |           | 33,607  |  |   |       | 36    |  |   |         | (284    | ) |   |           | 33,359  | 
|                      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |      
|Total debt securities |                                 |                | 226,682 |                  |       |   | 4,435 |        |  |   | (2,555           | )      |   |      | 228,562 |         |       |   | 1,093,705 |         |  |   | 2,455 |       |  |   | (27,943 | )       |   |   | 1,068,217 |        
|Equity securities     |                                 |                | 900     |                  |       |   | 7     |        |  |   |                 |        |   |      | 907     |         |       |   | 900       |         |  |   |      |       |  |   | (180    | )       |   |   | 720       |        
|                      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |      
|Total                 |                                 | $              | 227,582 |                  |       | $ | 4,442 |        |  | $ | (2,555           | )      |   | $    | 229,469 |         |       | $ | 1,094,605 |         |  | $ | 2,455 |       |  | $ | (28,123 | )       |   | $ | 1,068,937 |        
|                      |                                 |                |         |                  |       |   |       |        |  |   |                  |        |   |      |         |         |       |   |           |         |  |   |       |      






|    |                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | These interest-only securities are interests that continue to be
    held by the Company from the Companys off-balance sheet
    securitizations (see Note 18).

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






|                                                                  |  |                |         |  |            |   |         | 
|----------------------------------------------------------------- |  | -------------- | ------- |  | ---------- | - | ------- | 
|December 31, 2006                                                 |  | Cost           |         |  | Fair Value |  
|                                                                  |  |                |         |  |            |  
|                                                                  |  | (In thousands) |        
|Due in one year or less                                           |  | $              |        |  |            | $ |        | 
|Due after one year through five years                             |  |                |        |  |            |   |        | 
|Due after five years through ten years                            |  |                | 11,730  |  |            |   | 11,597  | 
|Due after ten years                                               |  |                | 12,069  |  |            |   | 11,964  | 
|Mortgage-backed securities and interests in securitization trusts |  |                | 202,883 |  |            |   | 205,001 | 
|                                                                  |  |                |         |  |            |  
|Total debt securities                                             |  | $              | 226,682 |  |            | $ | 228,562 | 
|                                                                  |  |                |         |  |            |  



|                            |  |                |     |   |      |   |         |      |  |   |        |  
|--------------------------- |  | -------------- | --- | - | ---- | - | ------- | ---- |  | - | ------ | -
|Year Ended December 31,     |  | 2006           |     |   | 2005 |   |         | 2004 | 
|                            |  |                |     |   |      |   |         |      | 
|                            |  | (In thousands) |    
|Gross realized gains        |  | $              |    |   |      | $ | 22,511  |      |  | $ |       |  
|Gross realized losses       |  |                | (22 | ) |      |   | (10,731 | )    |  |   | (6,506 | )
|                            |  |                |     |   |      |   |         |      | 
|Net realized gains (losses) |  | $              | (22 | ) |      | $ | 11,780  |      |  | $ | (6,506 | )
|                            |  |                |     |   |      |   |         |      | 







|   |                                   
|-- | ----------------------------------
|7. | Mortgage Loans Held for Investment



|                               |       |                |            |            |      |   |            |            | 
|------------------------------ | ----- | -------------- | ---------- | ---------- | ---- | - | ---------- | ---------- | 
|December 31,                   |       | 2006           |            |            | 2005 |  
|                               |       |                |            |            |      |  
|                               |       | (In thousands) |           
|Prime conforming               |       | $              | 988,448    |            |      | $ | 1,517,456  |           
|Prime non-conforming           |       |                | 9,060,112  |            |      |   | 6,186,374  |           
|Nonprime                       |       |                | 52,340,739 |            |      |   | 56,923,366 |           
|Prime second-lien              |       |                | 7,046,301  |            |      |   | 4,330,537  |           
|Government                     |       |                | 712        |            |      |   | 833        |           
|                               |       |                |            |            |      |  
|                               | Total |                |            | 69,436,312 |      |   |            | 68,958,566 | 
|Less allowance for loan losses |       |                | (1,508,361 | )          |      |   | (1,065,906 | )         
|                               |       |                |            |            |      |  
|Total, net                     |       | $              | 67,927,951 |            |      | $ | 67,892,660 |           
|                               |       |                |            |            |      |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)










|               |  |  |       |  
|-------------- |  |  | ----- | -
|California     |  |  | 12.9  | %
|Florida        |  |  | 8.8   |  
|United Kingdom |  |  | 4.7   |  
|Michigan       |  |  | 4.3   |  
|Texas          |  |  | 4.3   |  
|All other      |  |  | 65.0  |  
|               |  |  |      
|               |  |  | 100.0 | %
|               |  |  |      

loan-to


non-conforming non-conforming interest-only interest-only


non-conforming interest-only, 30-year 15-year


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


interest-only interest-only interest-only 30-year 15-year


loan-to loan-to loan-to-value loan-to






|   |                    
|-- | -------------------
|8. | Lending Receivables



|                               |                       |                |            |            |      |   |            |            | 
|------------------------------ | --------------------- | -------------- | ---------- | ---------- | ---- | - | ---------- | ---------- | 
|December 31,                   |                       | 2006           |            |            | 2005 |  
|                               |                       |                |            |            |      |  
|                               |                       | (In thousands) |           
|Construction:                  |                       |                |            |            |      |   |            |           
|                               | Residential           |                | $          | 2,697,171  |      |   | $          | 2,216,750  | 
|                               | Residential mezzanine |                |            | 380,830    |      |   |            | 315,637    | 
|                               | Resort                |                |            | 133,716    |      |   |            | 144,914    | 
|                               |                       |                |            |            |      |  
|Total construction             |                       |                | 3,211,717  |            |      |   | 2,677,301  |           
|Warehouse                      |                       |                | 8,804,803  |            |      |   | 9,003,196  |           
|Commercial business            |                       |                | 1,699,694  |            |      |   | 1,026,572  |           
|Healthcare                     |                       |                | 761,983    |            |      |   | 593,230    |           
|Commercial real estate         |                       |                | 335,938    |            |      |   | 212,272    |           
|Other                          |                       |                | 112,610    |            |      |   | 75,883     |           
|                               |                       |                |            |            |      |  
|                               | Total                 |                |            | 14,926,745 |      |   |            | 13,588,454 | 
|Less allowance for loan losses |                       |                | (396,641   | )          |      |   | (187,407   | )         
|                               |                       |                |            |            |      |  
|Total, net                     |                       | $              | 14,530,104 |            |      | $ | 13,401,047 |           
|                               |                       |                |            |            |      |  





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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|           |  |  |       |  
|---------- |  |  | ----- | -
|California |  |  | 20.4  | %
|Mexico     |  |  | 14.2  |  
|Florida    |  |  | 7.1   |  
|Virginia   |  |  | 4.4   |  
|Texas      |  |  | 4.1   |  
|All other  |  |  | 49.8  |  
|           |  |  |      
|           |  |  | 100.0 | %
|           |  |  |      







|                                                                |  |                |           |  |      |   |         | 
|--------------------------------------------------------------- |  | -------------- | --------- |  | ---- | - | ------- | 
|December 31,                                                    |  | 2006           |           |  | 2005 |  
|                                                                |  |                |           |  |      |  
|                                                                |  | (In thousands) |          
|Lending receivables considered to be impaired without allowance |  | $              | 2,779     |  |      | $ | 12,894  | 
|Lending receivables considered to be impaired with allowance    |  |                | 1,409,367 |  |      |   | 99,523  | 
|                                                                |  |                |           |  |      |  
|Total loans considered to be impaired                           |  | $              | 1,412,146 |  |      | $ | 112,417 | 
|                                                                |  |                |           |  |      |  
|Allowance for loan losses on impaired lending receivables       |  | $              | 213,631   |  |      | $ | 11,469  | 
|Impaired lending receivables which are on nonaccrual status     |  |                | 1,386,581 |  |      |   | 67,417  | 
|Average balance of impaired lending receivables during the year |  |                | 310,696   |  |      |   | 122,407 | 









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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






|   |                          
|-- | -------------------------
|9. | Allowance for Loan Losses



|                                                |  |                |           |   |             |   |         |       |  |   |        |   |  |   |           |  
|----------------------------------------------- |  | -------------- | --------- | - | ----------- | - | ------- | ----- |  | - | ------ | - |  | - | --------- | -
|                                                |  | Mortgage Loans |           |   |             |   |         |       | 
|                                                |  | Held for       |           |   | Lending     |   |         |       |  |  
|                                                |  | Investment     |           |   | Receivables |   |         | Other |  |   | Total  |  
|                                                |  |                |           |   |             |   |         |       |  |   |        |  
|                                                |  | (In thousands) |          
|Balance at January 1, 2004                      |  | $              | 490,991   |   |             | $ | 126,959 |       |  | $ |       |   |  | $ | 617,950   |  
|Provision for loan losses                       |  |                | 811,731   |   |             |   | 31,168  |       |  |   |       |   |  |   | 842,899   |  
|Charge-offs                                     |  |                | (440,400  | ) |             |   | (20,173 | )     |  |   |       |   |  |   | (460,573  | )
|Recoveries                                      |  |                | 10,632    |   |             |   | 3,769   |       |  |   |       |   |  |   | 14,401    |  
|                                                |  |                |           |   |             |   |         |       |  |   |        |  
|Balance at December 31, 2004                    |  |                | 872,954   |   |             |   | 141,723 |       |  |   |       |   |  |   | 1,014,677 |  
|Provision for loan losses                       |  |                | 599,785   |   |             |   | 52,011  |       |  |   |       |   |  |   | 651,796   |  
|Charge-offs                                     |  |                | (443,815  | ) |             |   | (6,792  | )     |  |   |       |   |  |   | (450,607  | )
|Recoveries                                      |  |                | 36,982    |   |             |   | 465     |       |  |   |       |   |  |   | 37,447    |  
|                                                |  |                |           |   |             |   |         |       |  |   |        |  
|Balance at December 31, 2005                    |  |                | 1,065,906 |   |             |   | 187,407 |       |  |   |       |   |  |   | 1,253,313 |  
|Consolidation of IB Finance Holding Company LLC |  |                |          |   |             |   |        |       |  |   | 25,667 |   |  |   | 25,667    |  
|Provision for loan losses                       |  |                | 1,116,350 |   |             |   | 217,310 |       |  |   | 424    |   |  |   | 1,334,084 |  
|Charge-offs                                     |  |                | (720,783  | ) |             |   | (9,287  | )     |  |   | (463   | ) |  |   | (730,533  | )
|Recoveries                                      |  |                | 46,888    |   |             |   | 1,211   |       |  |   | 129    |   |  |   | 48,228    |  
|                                                |  |                |           |   |             |   |         |       |  |   |        |  
|Balance at December 31, 2006                    |  | $              | 1,508,361 |   |             | $ | 396,641 |       |  | $ | 25,757 |   |  | $ | 1,930,759 |  
|                                                |  |                |           |   |             |   |         |       |  |   |        |  





|    |                          
|--- | -------------------------
|10. | Mortgage Servicing Rights



|                                                |                                                                                   |                                      |           |                |         |   |               |          |   |   |        |        |   |   |           |          |  
|----------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------ | --------- | -------------- | ------- | - | ------------- | -------- | - | - | ------ | ------ | - | - | --------- | -------- | -
|                                                |                                                                                   | Mortgage Servicing Rights Managed By |           |                |        
|                                                |                                                                                   |                                      |           |                |        
|                                                |                                                                                   |                                      |           | Residential    |         |   | International |          |   |  
|                                                |                                                                                   | GMAC                                 |           |                | Capital |   |               | Business |   |   |       
|                                                |                                                                                   | Residential                          |           |                | Group   |   |               | Group    |   |   | Total  |       
|                                                |                                                                                   |                                      |           |                |         |   |               |          |   |   |        |       
|                                                |                                                                                   |                                      |           | (In thousands) |         |   |              
|Estimated fair value at January 1, 2006         |                                                                                   | $                                    | 3,056,446 |                |         | $ | 959,708       |          |   | $ | 4,850  |        |   | $ | 4,021,004 |         
|Additions obtained from sales of mortgage loans |                                                                                   |                                      | 1,152,727 |                |         |   | 561,141       |          |   |   | 9,027  |        |   |   | 1,722,895 |         
|Additions from purchases of servicing assets    |                                                                                   |                                      | 11,780    |                |         |   |              |          |   |   |       |        |   |   | 11,780    |         
|Changes in fair value:                          |                                                                                   |                                      |           |                |         |   |               |          |   |   |        |        |   |   |           |         
|                                                | Due to changes in valuation inputs or assumptions used in the
    valuation model |                                      |           | (5,750         | )       |   |               | (37,469  | ) |   |        | (414   | ) |   |           | (43,633  | )
|                                                | Other changes in fair value                                                       |                                      |           | (462,470       | )       |   |               | (311,797 | ) |   |        | (1,453 | ) |   |           | (775,720 | )
|Other changes that affect the balance           |                                                                                   |                                      |          |                |         |   | (6,998        | )        |   |   | 733    |        |   |   | (6,265    | )       
|                                                |                                                                                   |                                      |           |                |         |   |               |          |   |   |        |       
|Estimated fair value at December 31, 2006       |                                                                                   | $                                    | 3,752,733 |                |         | $ | 1,164,585     |          |   | $ | 12,743 |        |   | $ | 4,930,061 |         
|                                                |                                                                                   |                                      |           |                |         |   |               |          |   |   |        |       

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






|                                                      |  |                        |           |             |         |   |               |          |  |   |          |  
|----------------------------------------------------- |  | ---------------------- | --------- | ----------- | ------- | - | ------------- | -------- |  | - | -------- | -
|                                                      |  |                        |           | Residential |         |   | International |         
|                                                      |  | GMAC                   |           |             | Capital |   |               | Business | 
|December 31, 2006                                     |  | Residential            |           |             | Group   |   |               | Group    | 
|                                                      |  |                        |           |             |         |   |               |          | 
|                                                      |  | (Dollars in thousands) |          
|Weighted average prepayment speed                     |  |                        | 15.6      | %           |         |   | 28.8          | %        |  |   | 9.9      | %
|Range of prepayment speeds (constant prepayment rate) |  |                        | 14.0-43.2 | %           |         |   | 13.8-38.3     | %        |  |   | 1.0-19.6 | %
|Impact on fair value of 10% adverse change            |  | $                      | (192,036  | )           |         | $ | (34,397       | )        |  | $ | (283     | )
|Impact on fair value of 20% adverse change            |  |                        | (350,944  | )           |         |   | (61,686       | )        |  |   | (572     | )
|Weighted average discount rate                        |  |                        | 8.5       | %           |         |   | 12.5          | %        |  |   | 8.0      | %
|Range of discount rates                               |  |                        | 8.2-13.0  | %           |         |   | 12.0-14.0     | %        |  |   | 8.0-8.0  | %
|Impact on fair value of 10% adverse change            |  | $                      | (36,090   | )           |         | $ | (30,933       | )        |  | $ | (271     | )
|Impact on fair value of 20% adverse change            |  |                        | (71,237   | )           |         |   | (60,011       | )        |  |   | (530     | )



|                                                      |  |             |           |             |         |  |               |          |  |  |          |  
|----------------------------------------------------- |  | ----------- | --------- | ----------- | ------- |  | ------------- | -------- |  |  | -------- | -
|                                                      |  |             |           | Residential |         |  | International |         
|                                                      |  | GMAC        |           |             | Capital |  |               | Business | 
|Year Ended December 31, 2006                          |  | Residential |           |             | Group   |  |               | Group    | 
|                                                      |  |             |           |             |         |  |               |          | 
|Range of prepayment speeds (constant prepayment rate) |  |             | 11.6-44.5 | %           |         |  | 8.4- 40.1     | %        |  |  | 1.0-10.4 | %
|Range of discount rates                               |  |             | 8.1-13.5  | %           |         |  | 11.0- 29.0    | %        |  |  | 8.0-8.0  | %



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                                                                  |  |                |           | 
|--------------------------------------------------------------------------------- |  | -------------- | --------- | 
|                                                                                  |  | (In thousands)
|Contractual servicing fees (net of guarantee fees and including
    subservicing) |  | $              | 1,326,896 | 
|Late fees                                                                         |  |                | 130,023   | 
|Ancillary fees                                                                    |  |                | 126,755   | 
|                                                                                  |  |                |           | 
|Total                                                                             |  | $              | 1,583,674 | 
|                                                                                  |  |                |           | 





|                                           |  |                |           |      |  |   |           |  
|------------------------------------------ |  | -------------- | --------- | ---- |  | - | --------- | -
|                                           |  | 2005           |           | 2004
|                                           |  |                |           |     
|                                           |  | (In thousands)
|Balance at January 1                       |  | $              | 4,294,846 |      |  | $ | 4,333,609 |  
|Originations and purchases, net of sales   |  |                | 1,331,124 |      |  |   | 1,469,350 |  
|Amortization                               |  |                | (999,342  | )    |  |   | (770,381  | )
|Valuation adjustments for hedge accounting |  |                | 86,328    |      |  |   | (271,669  | )
|Other than temporary impairment            |  |                | (54,568   | )    |  |   | (453,332  | )
|Other                                      |  |                |          |      |  |   | (12,731   | )
|                                           |  |                |           |      |  |   |           |  
|Balance at December 31                     |  |                | 4,658,388 |      |  |   | 4,294,846 |  
|Valuation allowance                        |  |                | (643,373  | )    |  |   | (928,854  | )
|                                           |  |                |           |      |  |   |           |  
|Carrying value at December 31              |  | $              | 4,015,015 |      |  | $ | 3,365,992 |  
|                                           |  |                |           |      |  |   |           |  
|Estimated fair value at December 31        |  | $              | 4,021,004 |      |  | $ | 3,366,768 |  
|                                           |  |                |           |      |  |   |           |  



|                                |  |                |          |      |  |   |           |  
|------------------------------- |  | -------------- | -------- | ---- |  | - | --------- | -
|                                |  | 2005           |          | 2004
|                                |  |                |          |     
|                                |  | (In thousands)
|Balance at January 1            |  | $              | 928,854  |      |  | $ | 1,149,302 |  
|Impairment                      |  |                | (237,353 | )    |  |   | 232,884   |  
|Other than temporary impairment |  |                | (54,568  | )    |  |   | (453,332  | )
|Other                           |  |                | 6,440    |      |  |   |          |  
|                                |  |                |          |      |  |   |           |  
|Balance at December 31          |  | $              | 643,373  |      |  | $ | 928,854   |  
|                                |  |                |          |      |  |   |           |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






|                                                      |  |                |           |      |  |   |            |  
|----------------------------------------------------- |  | -------------- | --------- | ---- |  | - | ---------- | -
|December 31,                                          |  | 2005           |           | 2004
|                                                      |  |                |           |     
|                                                      |  | (In thousands)
|Fair value of MSRs                                    |  | $              | 4,021,004 |      |  | $ | 3,366,768  |  
|                                                      |  |                |           |      |  |   |            |  
|Range of prepayment speeds (constant prepayment rate) |  |                | 8.3-28.2  | %    |  |   | 19.7- 29.8 | %
|Impact on fair value of 10% adverse change            |  | $              | (183,140  | )    |  | $ | (185,868   | )
|Impact on fair value of 20% adverse change            |  |                | (344,583  | )    |  |   | (353,200   | )
|Range of discount rates                               |  |                | 8.0-12.7  | %    |  |   | 10.0- 12.6 | %
|Impact on fair value of 10% adverse change            |  | $              | (105,946  | )    |  | $ | (101,565   | )
|Impact on fair value of 20% adverse change            |  |                | (205,466  | )    |  |   | (195,970   | )



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|    |                                     
|--- | ------------------------------------
|11. | Investments In Real Estate and Other



|                              |                                                |                |           |           |           |  |           |         |           | 
|----------------------------- | ---------------------------------------------- | -------------- | --------- | --------- | --------- |  | --------- | ------- | --------- | 
|December 31,                  |                                                | 2006           |           | 2005     
|                              |                                                |                |           |          
|                              |                                                | (In thousands)
|Residential real estate:      |                                                |                |           |           |           |  |           |        
|                              | Acquired through sale and leaseback agreements |                | $         | 1,045,328 |           |  | $         | 669,064 |          
|                              | Construction in progress                       |                |           | 152,712   |           |  |           | 116,820 |          
|                              | Real estate held for development               |                |           | 813,654   |           |  |           | 543,801 |          
|                              |                                                |                |           |           |           |  |           |        
|                              |                                                |                | 2,011,694 |           |           |  | 1,329,685 |        
|                              | Accumulated depreciation                       |                |           | (13,426   | )         |  |           | (9,350  | )        
|                              |                                                |                |           |           |           |  |           |        
|Total residential real estate |                                                |                | 1,998,268 |           |           |  | 1,320,335 |        
|Other investments:            |                                                |                |           |           |           |  |           |        
|                              | Investments in partnerships                    |                |           | 18,199    |           |  |           | 75,007  |          
|                              | Investments in real estate projects            |                |           | 410,490   |           |  |           | 245,393 |          
|                              | Other equity investments                       |                |           | 195,192   |           |  |           | 214,563 |          
|                              |                                                |                |           |           |           |  |           |        
|                              |                                                | Total          |           | $         | 2,622,149 |  |           | $       | 1,855,298 | 
|                              |                                                |                |           |           |           |  |           |        





|           |  |  |       |  
|---------- |  |  | ----- | -
|California |  |  | 25.1  | %
|Florida    |  |  | 22.5  |  
|Texas      |  |  | 11.3  |  
|Nevada     |  |  | 10.7  |  
|Arizona    |  |  | 6.8   |  
|All other  |  |  | 23.6  |  
|           |  |  |      
|Total      |  |  | 100.0 | %
|           |  |  |      



|                         |  |                |        | 
|------------------------ |  | -------------- | ------ | 
|Year Ending December 31, |  |               
|                         |  |               
|                         |  | (In thousands)
|2007                     |  | $              | 66,101 | 
|2008                     |  |                | 8,678  | 
|2009                     |  |                | 2,901  | 
|2010                     |  |                | 499    | 
|2011                     |  |                | 82     | 
|Thereafter               |  |                | 61     | 
|                         |  |                |        | 
|                         |  | $              | 78,322 | 
|                         |  |                |        | 



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                    |  |                |        |      |  |      |        |  |  |   |        | 
|----------------------------------- |  | -------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|Year Ended December 31,             |  | 2006           |        | 2005 |  | 2004
|                                    |  |                |        |      |  |     
|                                    |  | (In thousands)
|Investments in partnerships         |  | $              | 6,739  |      |  | $    | 24,077 |  |  | $ | 46,460 | 
|Investments in real estate projects |  |                | 26,625 |      |  |      | 36,822 |  |  |   | 43,904 | 
|Other equity investments            |  |                | 45,365 |      |  |      | 95,721 |  |  |   | 57,749 | 



|    |         
|--- | --------
|12. | Goodwill



|                                         |  |                |         |             |  |          |        |               |  |           |        |       |  |   |        |   |  |   |         |  |  |   |         |  
|---------------------------------------- |  | -------------- | ------- | ----------- |  | -------- | ------ | ------------- |  | --------- | ------ | ----- |  | - | ------ | - |  | - | ------- |  |  | - | ------- | -
|                                         |  |                |         | Residential |  | Business |        | International |  |           |        |      
|                                         |  | GMAC           |         | Capital     |  | Capital  |        | Business      |  | Corporate |        |      
|                                         |  | Residential    |         | Group       |  | Group    |        | Group         |  | and Other |        | Total
|                                         |  |                |         |             |  |          |        |               |  |           |        |      
|                                         |  | (In thousands)
|Balance at January 1, 2005               |  | $              | 173,036 |             |  | $        | 38,652 |               |  | $         | 10,748 |       |  | $ | 67,390 |   |  | $ | 164,452 |  |  | $ | 454,278 |  
|Additions                                |  |                | 4,730   |             |  |          |       |               |  |           |       |       |  |   | 10,148 |   |  |   | 365     |  |  |   | 15,243  |  
|Disposals                                |  |                |        |             |  |          |       |               |  |           |       |       |  |   |       |   |  |   |        |  |  |   |        |  
|Foreign currency translation adjustments |  |                |        |             |  |          |       |               |  |           |       |       |  |   | (6,577 | ) |  |   |        |  |  |   | (6,577  | )
|Other                                    |  |                |        |             |  |          |       |               |  |           |       |       |  |   | (3,176 | ) |  |   |        |  |  |   | (3,176  | )
|                                         |  |                |         |             |  |          |        |               |  |           |        |       |  |   |        |   |  |   |         |  |  |   |         |  
|Balance at December 31, 2005             |  |                | 177,766 |             |  |          | 38,652 |               |  |           | 10,748 |       |  |   | 67,785 |   |  |   | 164,817 |  |  |   | 459,768 |  
|Additions                                |  |                |        |             |  |          |       |               |  |           |       |       |  |   | 3,304  |   |  |   | 596     |  |  |   | 3,900   |  
|Disposals                                |  |                |        |             |  |          |       |               |  |           |       |       |  |   |       |   |  |   |        |  |  |   |        |  
|Foreign currency translation adjustments |  |                |        |             |  |          |       |               |  |           |       |       |  |   | 7,795  |   |  |   |        |  |  |   | 7,795   |  
|                                         |  |                |         |             |  |          |        |               |  |           |        |       |  |   |        |   |  |   |         |  |  |   |         |  
|Balance at December 31, 2006             |  | $              | 177,766 |             |  | $        | 38,652 |               |  | $         | 10,748 |       |  | $ | 78,884 |   |  | $ | 165,413 |  |  | $ | 471,463 |  
|                                         |  |                |         |             |  |          |        |               |  |           |        |       |  |   |        |   |  |   |         |  |  |   |         |  



|    |                       
|--- | ----------------------
|13. | Property and Equipment



|                                  |  |                |          |      |  |   |          |  
|--------------------------------- |  | -------------- | -------- | ---- |  | - | -------- | -
|December 31,                      |  | 2006           |          | 2005
|                                  |  |                |          |     
|                                  |  | (In thousands)
|Land and buildings                |  | $              | 18,493   |      |  | $ | 17,430   |  
|Furniture, fixtures and equipment |  |                | 377,551  |      |  |   | 341,427  |  
|Leasehold improvements            |  |                | 118,594  |      |  |   | 92,512   |  
|Capitalized software              |  |                | 239,545  |      |  |   | 210,236  |  
|                                  |  |                |          |      |  |   |          |  
|                                  |  |                | 754,183  |      |  |   | 661,605  |  
|Less: Accumulated depreciation    |  |                | (521,451 | )    |  |   | (465,778 | )
|                                  |  |                |          |      |  |   |          |  
|Total                             |  | $              | 232,732  |      |  | $ | 195,827  |  
|                                  |  |                |          |      |  |   |          |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|    |           
|--- | ----------
|14. | Borrowings



|                                                      |                                                       |                        |     |      |     |                |     |      |     |   |             |            |            |   |             |            |            | 
|----------------------------------------------------- | ----------------------------------------------------- | ---------------------- | --- | ---- | --- | -------------- | --- | ---- | --- | - | ----------- | ---------- | ---------- | - | ----------- | ---------- | ---------- | 
|                                                      |                                                       | Weighted-              |     |      |     |               
|                                                      |                                                       | Average                |     |      |     |               
|                                                      |                                                       | Interest Rates         |     |      |     |               
|December 31,                                          |                                                       | 2006                   |     | 2005 |     | 2006           |     | 2005
|                                                      |                                                       |                        |     |      |     |                |     |     
|                                                      |                                                       |                        |     |      |     | (In thousands)
|Affiliate borrowings                                  |                                                       |                        |    | %    |     |                | 7.4 | %    |     | $ |            |            |            | $ | 5,177,462   |           
|Collateralized borrowings in securitization trusts(a) |                                                       |                        | 5.6 |      |     |                | 4.8 |      |     |   | 53,299,518  |            |            |   | 56,097,801  |           
|Other borrowings:                                     |                                                       |                        |     |      |     |                |     |      |     |   |             |            |            |   |             |           
|                                                      | Secured aggregation facilities  short-term           |                        |     | 5.6  |     |                |     | 4.4  |     |   |             | 13,079,221 |            |   |             | 10,959,581 |           
|                                                      | Secured aggregation facilities  long-term(a)         |                        |     | 5.9  |     |                |     | 4.3  |     |   |             | 5,866,684  |            |   |             | 4,738,606  |           
|                                                      | Repurchase agreements  short-term                    |                        |     | 5.7  |     |                |     | 4.0  |     |   |             | 10,961,850 |            |   |             | 9,896,658  |           
|                                                      | Repurchase agreements  long-term(a)                  |                        |     | 6.8  |     |                |     |     |     |   |             | 543,675    |            |   |             |           |           
|                                                      | Senior unsecured notes(a)                             |                        |     | 6.3  |     |                |     | 6.2  |     |   |             | 12,408,822 |            |   |             | 5,150,519  |           
|                                                      | Subordinated unsecured notes(a)                       |                        |     | 7.2  |     |                |     |     |     |   |             | 1,000,000  |            |   |             |           |           
|                                                      | FHLB advances  short-term                            |                        |     |     |     |                |     | 3.4  |     |   |             |           |            |   |             | 1,506,000  |           
|                                                      | FHLB advances  long-term(a)                          |                        |     | 5.0  |     |                |     | 4.3  |     |   |             | 7,279,000  |            |   |             | 2,922,000  |           
|                                                      | Third-party bank credit facilities  short-term       |                        |     | 5.0  |     |                |     | 2.1  |     |   |             | 475,000    |            |   |             | 450,000    |           
|                                                      | Third-party bank credit facilities 
    long-term(a) |                        |     | 6.1  |     |                |     | 5.6  |     |   |             | 1,750,000  |            |   |             | 1,750,000  |           
|                                                      | Debt collateralized by mortgage loans                 |                        |     | 5.9  |     |                |     | 4.9  |     |   |             | 3,017,961  |            |   |             | 2,150,529  |           
|                                                      | Servicing advances                                    |                        |     | 6.0  |     |                |     | 5.0  |     |   |             | 728,750    |            |   |             | 571,532    |           
|                                                      | Investor custodial funds                              |                        |     |     |     |                |     |     |     |   |             | 131,709    |            |   |             | 120,985    |           
|                                                      | Other  short-term                                    |                        |     | 6.1  |     |                |     | 4.5  |     |   |             | 1,820,111  |            |   |             | 1,802,789  |           
|                                                      | Other  long-term(a)                                  |                        |     | 6.0  |     |                |     | 9.6  |     |   |             | 817,595    |            |   |             | 281,308    |           
|                                                      |                                                       |                        |     |      |     |                |     |      |     |   |             |            |            |   |             |           
|                                                      |                                                       | Total other borrowings |     |      | 5.8 |                |     |      | 4.6 |   |             |            | 59,880,378 |   |             |            | 42,300,507 | 
|                                                      |                                                       |                        |     |      |     |                |     |      |     |   |             |            |            |   |             |           
|Total borrowings                                      |                                                       |                        | 5.7 | %    |     |                | 4.8 | %    |     | $ | 113,179,896 |            |            | $ | 103,575,770 |           
|                                                      |                                                       |                        |     |      |     |                |     |      |     |   |             |            |            |   |             |           






|    |                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents borrowings with an original contractual maturity in
    excess of one year. In addition, affiliate borrowings had
    $4.1 billion of borrowings with an original maturity in
    excess of one year at December 31, 2005.



|                                     |                                       |                |            |             |  |   |            |             | 
|------------------------------------ | ------------------------------------- | -------------- | ---------- | ----------- |  | - | ---------- | ----------- | 
|December 31,                         |                                       | 2006           |            | 2005       
|                                     |                                       |                |            |            
|                                     |                                       | (In thousands)
|Mortgage loans held for investment   |                                       | $              | 68,480,110 |             |  | $ | 67,798,758 |            
|Mortgage loans held for sale         |                                       |                | 22,833,819 |             |  |   | 16,147,391 |            
|Trading securities                   |                                       |                | 3,639,702  |             |  |   | 2,696,896  |            
|Available for sale securities        |                                       |                | 17,991     |             |  |   | 929,112    |            
|Mortgage servicing rights            |                                       |                | 2,447,084  |             |  |   | 2,220,657  |            
|Lending receivables                  |                                       |                | 11,804,708 |             |  |   | 11,020,766 |            
|Accounts receivable                  |                                       |                | 946,014    |             |  |   | 795,149    |            
|Investments in real estate and other |                                       |                | 719,116    |             |  |   | 357,644    |            
|Other assets                         |                                       |                | 1,545,700  |             |  |   | 238,758    |            
|                                     |                                       |                |            |             |  |   |            |            
|                                     | Total assets restricted as collateral |                | $          | 112,434,244 |  |   | $          | 102,205,131 | 
|                                     |                                       |                |            |             |  |   |            |            
|Related secured debt                 |                                       | $              | 96,206,963 |             |  | $ | 89,939,405 |            
|                                     |                                       |                |            |             |  |   |            |            

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                     |       |                |           |            |  |   |           |           | 
|------------------------------------ | ----- | -------------- | --------- | ---------- |  | - | --------- | --------- | 
|December 31,                         |       | 2006           |           | 2005      
|                                     |       |                |           |           
|                                     |       | (In thousands)
|Mortgage loans held for sale         |       | $              | 5,513,015 |            |  | $ | 3,880,448 |          
|Mortgage loans held for investment   |       |                | 1,667,978 |            |  |   | 2,429,880 |          
|Available for sale securities        |       |                |          |            |  |   | 927,140   |          
|Trading securities                   |       |                | 2,945,653 |            |  |   | 2,126,393 |          
|Investments in real estate and other |       |                | 48,193    |            |  |   | 6,276     |          
|                                     |       |                |           |            |  |   |           |          
|                                     | Total |                | $         | 10,174,839 |  |   | $         | 9,370,137 | 
|                                     |       |                |           |            |  |   |           |          





|                         |  |                |            |  
|------------------------ |  | -------------- | ---------- | -
|Year Ending December 31, |  |               
|                         |  |               
|                         |  | (In thousands)
|2007                     |  | $              | 1,466,863  |  
|2008                     |  |                | 11,949,590 |  
|2009                     |  |                | 3,819,359  |  
|2010                     |  |                | 3,399,956  |  
|2011                     |  |                | 2,928,623  |  
|2012 and thereafter      |  |                | 59,448,464 |  
|                         |  |                |            |  
|Long-term principal      |  |                | 83,012,855 |  
|Unamortized discount     |  |                | (47,560    | )
|                         |  |                |            |  
|Total long-term debt     |  | $              | 82,965,295 |  
|                         |  |                |            |  





| |                     
| | --------------------
| | Affiliate Borrowings





| |                                                   
| | --------------------------------------------------
| | Collateralized borrowings in securitization trusts



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








| |                 
| | ----------------
| | Other borrowings

Secured aggregation facilities






Repurchase agreements


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Senior unsecured notes


FHLB advances


Third-party bank credit facilities


Debt collateralized by mortgage loans


Investor custodial funds




|    |             
|--- | ------------
|15. | Income Taxes



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                       |                 |                          |          |          |          |      |         |         |         |  |          |          |         | 
|-------------------------------------- | --------------- | ------------------------ | -------- | -------- | -------- | ---- | ------- | ------- | ------- |  | -------- | -------- | ------- | 
|Year Ended December 31,                |                 | 2006                     |          | 2005     |          | 2004
|                                       |                 |                          |          |          |          |     
|                                       |                 | (In thousands)          
|Current income tax expense (benefit):  |                 |                          |          |          |          |      |         |         |         |  |          |         
|                                       | Federal         |                          | $        | (68,574  | )        |      | $       | 317,897 |         |  | $        | (260,802 | )      
|                                       | State and local |                          |          | 51,093   |          |      |         | 48,501  |         |  |          | 16,147   |        
|                                       | Foreign         |                          |          | 73,752   |          |      |         | 13,376  |         |  |          | 4,691    |        
|                                       |                 |                          |          |          |          |      |         |         |         |  |          |         
|                                       |                 |                          | 56,271   |          |          |      | 379,774 |         |         |  | (239,964 | )       
|Deferred income tax expense (benefit): |                 |                          |          |          |          |      |         |         |         |  |          |         
|                                       | Federal         |                          |          | (240,649 | )        |      |         | 132,971 |         |  |          | 745,415  |        
|                                       | State and local |                          |          | (75,380  | )        |      |         | 49,981  |         |  |          | 105,959  |        
|                                       | Foreign         |                          |          | (29,415  | )        |      |         | 43,574  |         |  |          | 30,730   |        
|                                       |                 |                          |          |          |          |      |         |         |         |  |          |         
|                                       |                 |                          | (345,444 | )        |          |      | 226,526 |         |         |  | 882,104  |         
|                                       |                 |                          |          |          |          |      |         |         |         |  |          |         
|                                       |                 | Total income tax expense |          | $        | (289,173 | )    |         | $       | 606,300 |  |          | $        | 642,140 | 
|                                       |                 |                          |          |          |          |      |         |         |         |  |          |         



|                          |                                                   |                                |   |        |         |   |   |         |           |  
|------------------------- | ------------------------------------------------- | ------------------------------ | - | ------ | ------- | - | - | ------- | --------- | -
|December 31,              |                                                   | 2006                           |   | 2005  
|                          |                                                   |                                |   |       
|                          |                                                   | (In thousands)                
|Deferred tax assets:      |                                                   |                                |   |        |         |   |   |        
|                          | Allowance for loan losses                         |                                | $ | 7,173  |         |   | $ | 157,827 |          
|                          | Accruals not currently deductible                 |                                |   | 6,543  |         |   |   | 74,294  |          
|                          | Basis difference in mortgage loans and securities |                                |   | 48     |         |   |   | 232,969 |          
|                          | Securitization activity                           |                                |   | 18,242 |         |   |   |        |          
|                          | Loss carryforwards                                |                                |   | 52,926 |         |   |   | 40,458  |          
|                          | Depreciation                                      |                                |   | 8,168  |         |   |   | 22,680  |          
|                          | Available for sale securities                     |                                |   | 32     |         |   |   | 8,984   |          
|                          | Other                                             |                                |   | 934    |         |   |   | 2,863   |          
|                          |                                                   |                                |   |        |         |   |   |        
|                          |                                                   | Total deferred tax assets      |   |        | 94,066  |   |   |         | 540,075   |  
|Deferred tax liabilities: |                                                   |                                |   |        |         |   |   |        
|                          | Mortgage servicing rights                         |                                |   | 15,568 |         |   |   | 857,116 |          
|                          | Basis difference in mortgage loans and securities |                                |   | 48,418 |         |   |   |        |          
|                          | Foreign intercompany tax settlements              |                                |   |       |         |   |   | 35,830  |          
|                          | Securitization activity                           |                                |   | 496    |         |   |   | 7,710   |          
|                          | Cash flow hedges                                  |                                |   | 137    |         |   |   | 62,726  |          
|                          | Amortization of intangibles                       |                                |   | 2,715  |         |   |   | 33,971  |          
|                          | Expenses deductible when paid                     |                                |   | 5,015  |         |   |   |        |          
|                          | Auto lease activity                               |                                |   | 77,031 |         |   |   |        |          
|                          | Other                                             |                                |   | 446    |         |   |   | 19,449  |          
|                          |                                                   |                                |   |        |         |   |   |        
|                          |                                                   | Total deferred tax liabilities |   |        | 149,826 |   |   |         | 1,016,802 |  
|                          |                                                   |                                |   |        |         |   |   |        
|                          |                                                   | Net deferred tax liability     |   | $      | (55,760 | ) |   | $       | (476,727  | )
|                          |                                                   |                                |   |        |         |   |   |        



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)














|                                                  |                                    |        |          |          |   |        |        |         |    |        |         |         |  |  |      |      |   |   |         |         |  |  |      |      |  
|------------------------------------------------- | ---------------------------------- | ------ | -------- | -------- | - | ------ | ------ | ------- | -- | ------ | ------- | ------- |  |  | ---- | ---- | - | - | ------- | ------- |  |  | ---- | ---- | -
|                                                  |                                    | 2006   |          | 2005     |   | 2004  
|                                                  |                                    |        |          |          |   |       
|Year Ended December 31,                           |                                    | Amount |          | Percent  |   | Amount |        | Percent |    | Amount |         | Percent
|                                                  |                                    |        |          |          |   |        |        |         |    |        |         |        
|Computed income tax expense                       |                                    | $      | 145,572  |          |   |        | 35.0   | %       |    | $      | 569,424 |         |  |  | 35.0 | %    |   | $ | 563,623 |         |  |  | 35.0 | %   
|State taxes, net of federal benefit if applicable |                                    |        | 46,887   |          |   |        | 11.3   |         |    |        | 64,942  |         |  |  | 4.0  |      |   |   | 79,368  |         |  |  | 4.9  |     
|LLC losses not subject to federal tax             |                                    |        | 60,226   |          |   |        | 14.5   |         |    |        |        |         |  |  | 0.0  |      |   |   |        |         |  |  | 0.0  |     
|LLC conversion deferred tax write-off             |                                    |        | (523,168 | )        |   |        | (125.8 | )       |    |        |        |         |  |  | 0.0  |      |   |   |        |         |  |  | 0.0  |     
|Impact of foreign operations                      |                                    |        | (23,316  | )        |   |        | (5.6   | )       |    |        | (18,565 | )       |  |  | (1.1 | )    |   |   | (5,294  | )       |  |  | (0.3 | )   
|Other, net                                        |                                    |        | 4,626    |          |   |        | 1.1    |         |    |        | (9,501  | )       |  |  | (0.6 | )    |   |   | 4,443   |         |  |  | 0.3  |     
|                                                  |                                    |        |          |          |   |        |        |         |    |        |         |         |  |  |      |      |   |   |         |         |  |  |      |     
|                                                  | Total income tax expense (benefit) |        | $        | (289,173 | ) |        |        | (69.5   | )% |        | $       | 606,300 |  |  |      | 37.3 | % |   | $       | 642,140 |  |  |      | 39.9 | %
|                                                  |                                    |        |          |          |   |        |        |         |    |        |         |         |  |  |      |      |   |   |         |         |  |  |      |     

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|    |                    
|--- | -------------------
|16. | Deposit Liabilities



|                                       |  |                |           |      |  |   |           | 
|-------------------------------------- |  | -------------- | --------- | ---- |  | - | --------- | 
|December 31,                           |  | 2006           |           | 2005
|                                       |  |                |           |     
|                                       |  | (In thousands)
|Non-interest bearing deposits          |  | $              | 1,358,630 |      |  | $ | 1,368,345 | 
|NOW and money-market checking accounts |  |                | 1,806,156 |      |  |   | 508,830   | 
|Certificates of deposit                |  |                | 6,686,240 |      |  |   | 2,246,129 | 
|                                       |  |                |           |      |  |   |           | 
|Total                                  |  | $              | 9,851,026 |      |  | $ | 4,123,304 | 
|                                       |  |                |           |      |  |   |           | 





|                         |  |                |           | 
|------------------------ |  | -------------- | --------- | 
|Year Ending December 31, |  |               
|                         |  | (In thousands)
|2007                     |  | $              | 2,875,700 | 
|2008                     |  |                | 1,493,009 | 
|2009                     |  |                | 668,472   | 
|2010                     |  |                | 297,826   | 
|2011                     |  |                | 94,914    | 
|2012 and thereafter      |  |                | 1,810     | 
|                         |  |                |           | 
|Total brokered deposits  |  | $              | 5,431,731 | 
|                         |  |                |           | 

17.     Employee Benefit Plans






|                          |  |                |         |      |  |      |        |  |  |   |        | 
|------------------------- |  | -------------- | ------- | ---- |  | ---- | ------ |  |  | - | ------ | 
|Year Ended December 31,   |  | 2006           |         | 2005 |  | 2004
|                          |  |                |         |      |  |     
|                          |  | (In thousands)
|Defined benefit plan      |  | $              | (30,299 | )    |  | $    | 17,139 |  |  | $ | 25,512 | 
|Defined contribution plan |  |                | 25,601  |      |  |      | 22,398 |  |  |   | 20,036 | 
|                          |  |                |         |      |  |      |        |  |  |   |        | 
|Total                     |  | $              | (4,698  | )    |  | $    | 39,537 |  |  | $ | 45,548 | 
|                          |  |                |         |      |  |      |        |  |  |   |        | 

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


18.     Off-Balance Sheet
Securitization Transactions








|                              |  |                |          |   |          |       |            |             |  |  |            |   |  |  |      |  
|----------------------------- |  | -------------- | -------- | - | -------- | ----- | ---------- | ----------- |  |  | ---------- | - |  |  | ---- | -
|                              |  |                |          |   |          | Prime |            |             | 
|                              |  | Prime          |          |   | Nonprime |       |            | Second-Lien |  |  | Government |  
|                              |  | Non-Conforming |          |   | Mortgage |       |            | Mortgage    |  |  | Mortgage   |  
|Year Ended December 31, 2006  |  | Mortgage Loans |          |   | Loans    |       |            | Loans       |  |  | Loans      |  
|                              |  |                |          |   |          |       |            |             |  |  |            |  
|Prepayment speeds             |  |                | 0.9-22.0 | % |          |       | 0.0- 90.0  | %           |  |  | 31.0- 44.2 | % |  |  | 15.0 | %
|Weighted average life (years) |  |                | 3.6-10.5 |   |          |       | 2.1-6.6    |             |  |  | 1.7-2.4    |   |  |  | 1.1  |  
|Expected credit losses        |  |                | 0.0-1.6  | % |          |       | 1.2- 18.3  | %           |  |  | 1.1-2.3    | % |  |  | 4.0  | %
|Discount rate                 |  |                | 7.8-25.0 | % |          |       | 12.5- 16.5 | %           |  |  | 11.7- 12.5 | % |  |  | 7.0  | %

|                              |  |                |          |   |          |       |            |             |  |  |            |   |  |  |      |  
|----------------------------- |  | -------------- | -------- | - | -------- | ----- | ---------- | ----------- |  |  | ---------- | - |  |  | ---- | -
|                              |  |                |          |   |          | Prime |            |             | 
|                              |  | Prime          |          |   | Nonprime |       |            | Second-Lien |  |  | Government |  
|                              |  | Non-Conforming |          |   | Mortgage |       |            | Mortgage    |  |  | Mortgage   |  
|Year Ended December 31, 2005  |  | Mortgage Loans |          |   | Loans    |       |            | Loans       |  |  | Loans      |  
|                              |  |                |          |   |          |       |            |             |  |  |            |  
|Prepayment speeds             |  |                | 7.0-28.3 | % |          |       | 0.0- 60.0  | %           |  |  | 31.6- 36.3 | % |  |  | 15.0 | %
|Weighted average life (years) |  |                | 3.1-8.5  |   |          |       | 1.8-6.6    |             |  |  | 2.0-3.3    |   |  |  | 1.1  |  
|Expected credit losses        |  |                | 0.0-1.5  | % |          |       | 0.1-4.8    | %           |  |  | 1.9-2.3    | % |  |  | 4.9  | %
|Discount rate                 |  |                | 8.0-12.5 | % |          |       | 11.5- 21.4 | %           |  |  | 12.0- 16.5 | % |  |  | 6.5  | %

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                  |                                                                                    |                |          |          |          |       |          |             |   |   |            |         |   |   |      |       |  
|--------------------------------- | ---------------------------------------------------------------------------------- | -------------- | -------- | -------- | -------- | ----- | -------- | ----------- | - | - | ---------- | ------- | - | - | ---- | ----- | -
|                                  |                                                                                    |                |          |          |          | Prime |          |             |  
|                                  |                                                                                    | Prime          |          |          | Nonprime |       |          | Second-Lien |   |   | Government |        
|                                  |                                                                                    | Non-Conforming |          |          | Mortgage |       |          | Mortgage    |   |   | Mortgage   |        
|Year Ended December 31, 2006      |                                                                                    | Mortgage Loans |          |          | Loans    |       |          | Loans       |   |   | Loans      |        
|                                  |                                                                                    |                |          |          |          |       |          |             |   |   |            |        
|                                  |                                                                                    | (In millions)  |         
|Cash inflows:                     |                                                                                    |                |          |          |          |       |          |             |   |   |            |         |   |   |      |      
|                                  | Proceeds from new securitizations                                                  |                | $        | 28,361.2 |          |       | $        | 30,612.0    |   |   | $          | 6,655.0 |   |   | $    | 58.4  |  
|                                  | Servicing fees received                                                            |                |          | 221.8    |          |       |          | 192.6       |   |   |            | 65.0    |   |   |      | 0.6   |  
|                                  | Other cash flows received on interests that continue to be held
    by the Company |                |          | 154.4    |          |       |          | 297.2       |   |   |            | 122.9   |   |   |      | 12.4  |  
|                                  | Repayments of servicing advances                                                   |                |          | 461.9    |          |       |          | 709.9       |   |   |            | 27.6    |   |   |      |      |  
|Cash outflows:                    |                                                                                    |                |          |          |          |       |          |             |   |   |            |         |   |   |      |      
|                                  | Servicing advances                                                                 |                |          | (490.5   | )        |       |          | (773.0      | ) |   |            | (1.1    | ) |   |      |      |  
|Purchase obligations and options: |                                                                                    |                |          |          |          |       |          |             |   |   |            |         |   |   |      |      
|                                  | Mortgage loans under conditional call option                                       |                |          |         |          |       |          |            |   |   |            |        |   |   |      | (20.0 | )
|                                  | Representations and warranties obligations                                         |                |          | (55.4    | )        |       |          | (38.2       | ) |   |            | (0.4    | ) |   |      |      |  
|                                  | Asset performance conditional calls                                                |                |          | (33.9    | )        |       |          | (37.5       | ) |   |            | (10.1   | ) |   |      |      |  
|                                  | Clean-up calls                                                                     |                |          | (23.2    | )        |       |          | (939.9      | ) |   |            | (91.9   | ) |   |      |      |  
|                                  | Administrator or servicer actions                                                  |                |          |         |          |       |          |            |   |   |            | (59.5   | ) |   |      |      |  
|                                  |                                                                                    |                |          |          |          |       |          |             |   |   |            |        
|Net cash flow                     |                                                                                    | $              | 28,596.3 |          |          | $     | 30,023.1 |             |   | $ | 6,707.5    |         |   | $ | 51.4 |      
|                                  |                                                                                    |                |          |          |          |       |          |             |   |   |            |        

|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |      |      |  
|--------------------------------- | ---------------------------------------------------------------------------------- | -------------- | -------- | -------- | -------- | ----- | ------- | ----------- | - | - | ---------- | ------- | - | - | ---- | ---- | -
|                                  |                                                                                    |                |          |          |          | Prime |         |             |  
|                                  |                                                                                    | Prime          |          |          | Nonprime |       |         | Second-Lien |   |   | Government |        
|                                  |                                                                                    | Non-Conforming |          |          | Mortgage |       |         | Mortgage    |   |   | Mortgage   |        
|Year Ended December 31, 2005      |                                                                                    | Mortgage Loans |          |          | Loans    |       |         | Loans       |   |   | Loans      |        
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        
|                                  |                                                                                    | (In millions)  |         
|Cash inflows:                     |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |      |     
|                                  | Proceeds from new securitizations                                                  |                | $        | 27,548.2 |          |       | $       | 9,311.6     |   |   | $          | 5,071.3 |   |   | $    | 56.1 |  
|                                  | Servicing fees received                                                            |                |          | 135.2    |          |       |         | 69.0        |   |   |            | 40.0    |   |   |      | 0.8  |  
|                                  | Other cash flows received on interests that continue to be held
    by the Company |                |          | 142.2    |          |       |         | 285.2       |   |   |            | 133.0   |   |   |      | 22.3 |  
|                                  | Repayments of servicing advances                                                   |                |          | 336.3    |          |       |         | 755.7       |   |   |            | 22.7    |   |   |      | 0.7  |  
|Cash outflows:                    |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |      |     
|                                  | Servicing advances                                                                 |                |          | (353.5   | )        |       |         | (807.2      | ) |   |            | (2.1    | ) |   |      | (0.6 | )
|Purchase obligations and options: |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |      |     
|                                  | Mortgage loans under conditional call option                                       |                |          |         |          |       |         |            |   |   |            |        |   |   |      | (8.5 | )
|                                  | Representations and warranties obligations                                         |                |          | (10.0    | )        |       |         | (17.6       | ) |   |            | (1.7    | ) |   |      |     |  
|                                  | Asset performance conditional calls                                                |                |          | (19.1    | )        |       |         | (50.3       | ) |   |            | (29.9   | ) |   |      |     |  
|                                  | Clean-up calls                                                                     |                |          | (118.2   | )        |       |         | (1,889.0    | ) |   |            | (195.2  | ) |   |      |     |  
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        
|Net cash flow                     |                                                                                    | $              | 27,661.1 |          |          | $     | 7,657.4 |             |   | $ | 5,038.1    |         |   | $ | 70.8 |     
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |       |       |  
|--------------------------------- | ---------------------------------------------------------------------------------- | -------------- | -------- | -------- | -------- | ----- | ------- | ----------- | - | - | ---------- | ------- | - | - | ----- | ----- | -
|                                  |                                                                                    |                |          |          |          | Prime |         |             |  
|                                  |                                                                                    | Prime          |          |          | Nonprime |       |         | Second-Lien |   |   | Government |        
|                                  |                                                                                    | Non-Conforming |          |          | Mortgage |       |         | Mortgage    |   |   | Mortgage   |        
|Year Ended December 31, 2004      |                                                                                    | Mortgage Loans |          |          | Loans    |       |         | Loans       |   |   | Loans      |        
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        
|                                  |                                                                                    | (In millions)  |         
|Cash inflows:                     |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |       |      
|                                  | Proceeds from new securitizations                                                  |                | $        | 14,628.5 |          |       | $       | 9,440.2     |   |   | $          | 5,235.5 |   |   | $     | 108.1 |  
|                                  | Servicing fees received                                                            |                |          | 108.1    |          |       |         | 68.1        |   |   |            | 30.3    |   |   |       | 1.1   |  
|                                  | Other cash flows received on interests that continue to be held
    by the Company |                |          | 166.6    |          |       |         | 392.5       |   |   |            | 140.3   |   |   |       | 30.1  |  
|                                  | Repayments of servicing advances                                                   |                |          | 85.7     |          |       |         | 293.1       |   |   |            | 567.1   |   |   |       | 0.7   |  
|Cash outflows:                    |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |       |      
|                                  | Servicing advances                                                                 |                |          | (92.9    | )        |       |         | (324.1      | ) |   |            | (617.4  | ) |   |       | (0.8  | )
|Purchase obligations and options: |                                                                                    |                |          |          |          |       |         |             |   |   |            |         |   |   |       |      
|                                  | Mortgage loans under conditional call option                                       |                |          |         |          |       |         |            |   |   |            |        |   |   |       | (21.6 | )
|                                  | Representations and warranties obligations                                         |                |          | (2.7     | )        |       |         | (37.1       | ) |   |            | (25.7   | ) |   |       |      |  
|                                  | Asset performance conditional calls                                                |                |          | (35.9    | )        |       |         | (87.7       | ) |   |            | (12.0   | ) |   |       | (1.1  | )
|                                  | Clean-up calls                                                                     |                |          | (3,448.3 | )        |       |         | (207.1      | ) |   |            | (141.5  | ) |   |       |      |  
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        
|Net cash flow                     |                                                                                    | $              | 11,409.1 |          |          | $     | 9,537.9 |             |   | $ | 5,176.6    |         |   | $ | 116.5 |      
|                                  |                                                                                    |                |          |          |          |       |         |             |   |   |            |        



|                                                                                              |  |                                                                         |          |   |          |       |            |             |  |   |            |   |  |   |      |  
|--------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- | -------- | - | -------- | ----- | ---------- | ----------- |  | - | ---------- | - |  | - | ---- | -
|                                                                                              |  |                                                                         |          |   |          | Prime |            |             | 
|                                                                                              |  | Prime                                                                   |          |   | Nonprime |       |            | Second-Lien |  |   | Government |  
|                                                                                              |  | Non-Conforming                                                          |          |   | Mortgage |       |            | Mortgage    |  |   | Mortgage   |  
|December 31, 2006                                                                             |  | Mortgage Loans                                                          |          |   | Loans    |       |            | Loans       |  |   | Loans      |  
|                                                                                              |  |                                                                         |          |   |          |       |            |             |  |   |            |  
|                                                                                              |  | (In millions)                                                           |         
|Carrying amount/fair value of interest securities that continue
    to be held by the Company |  | $                                                                       | 669.7    |   |          | $     | 308.8      |             |  | $ | 429.3      |   |  | $ | 12.5 |  
|Prepayment speeds                                                                             |  |                                                                         | 1.0-28.4 | % |          |       | 0-90.0     | %           |  |   | 33.4-51.7  | % |  |   | 15.0 | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (31.5    | ) |          | $     | (2.7       | )           |  | $ | (20.3      | ) |  | $ |     |  
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (58.9    | ) |          |       | (5.8       | )           |  |   | (37.7      | ) |  |   |     |  
|Weighted average life (years)                                                                 |  |                                                                         | 2.7-8.9  |   |          |       | 1.8-6.5    |             |  |   | 1.5-2.2    |   |  |   | 1.1  |  
|Expected credit losses                                                                        |  |                                                                         | 0-1.6    | % |          |       | 0.1- 12.8  | %           |  |   | 0.6-2.6    | % |  |   | 3.6  | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (5.0     | ) |          | $     | (17.8      | )           |  | $ | (13.4      | ) |  | $ | (0.4 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (9.9     | ) |          |       | (32.3      | )           |  |   | (26.7      | ) |  |   | (0.8 | )
|Discount rate                                                                                 |  |                                                                         | 7.5-25.0 | % |          |       | 12.5- 43.5 | %           |  |   | 13.0- 20.0 | % |  |   | 6.5  | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (28.2    | ) |          | $     | (12.0      | )           |  | $ | (11.1      | ) |  | $ | (0.1 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (53.1    | ) |          |       | (18.9      | )           |  |   | (21.6      | ) |  |   | (0.1 | )
|Interest rates on variable and adjustable contracts                                           |  | Forward benchmark interest rate yield curve plus contractual
    spread
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       |         |   |          | $     | (18.7      | )           |  | $ | (18.3      | ) |  | $ | (0.7 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         |         |   |          |       | (36.1      | )           |  |   | (36.1      | ) |  |   | (1.4 | )

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


|                                                                                              |  |                                                                         |          |   |          |       |            |             |  |   |            |   |  |   |      |  
|--------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- | -------- | - | -------- | ----- | ---------- | ----------- |  | - | ---------- | - |  | - | ---- | -
|                                                                                              |  |                                                                         |          |   |          | Prime |            |             | 
|                                                                                              |  | Prime                                                                   |          |   | Nonprime |       |            | Second-Lien |  |   | Government |  
|                                                                                              |  | Non-Conforming                                                          |          |   | Mortgage |       |            | Mortgage    |  |   | Mortgage   |  
|December 31, 2005                                                                             |  | Mortgage Loans                                                          |          |   | Loans    |       |            | Loans       |  |   | Loans      |  
|                                                                                              |  |                                                                         |          |   |          |       |            |             |  |   |            |  
|                                                                                              |  | (In millions)                                                           |         
|Carrying amount/fair value of interest securities that continue
    to be held by the Company |  | $                                                                       | 433.5    |   |          | $     | 359.3      |             |  | $ | 247.9      |   |  | $ | 16.0 |  
|Prepayment speeds                                                                             |  |                                                                         | 7.0-37.5 | % |          |       | 0-60.0     | %           |  |   | 23.8-42.8  | % |  |   | 15.0 | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (19.6    | ) |          | $     | (10.6      | )           |  | $ | (15.5      | ) |  | $ |     |  
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (37.7    | ) |          |       | (15.8      | )           |  |   | (28.7      | ) |  |   |     |  
|Weighted average life (years)                                                                 |  |                                                                         | 2.8-6.2  |   |          |       | 1.8-3.6    |             |  |   | 1.0-2.1    |   |  |   | 1.1  |  
|Expected credit losses                                                                        |  |                                                                         | 0-2.0    | % |          |       | 0-16.9     | %           |  |   | 0.7-2.8    | % |  |   | 4.9  | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (4.3     | ) |          | $     | (25.4      | )           |  | $ | (12.7      | ) |  | $ | (0.7 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (8.7     | ) |          |       | (45.5      | )           |  |   | (25.3      | ) |  |   | (1.4 | )
|Discount rate                                                                                 |  |                                                                         | 8.0-12.8 | % |          |       | 10.2- 40.0 | %           |  |   | 11.5- 13.5 | % |  |   | 6.5  | %
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | (16.5    | ) |          | $     | (10.5      | )           |  | $ | (6.7       | ) |  | $ | (0.1 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | (31.8    | ) |          |       | (20.3      | )           |  |   | (13.0      | ) |  |   | (0.2 | )
|Interest rates on variable and adjustable contracts                                           |  | Forward benchmark interest rate yield curve plus contractual
    spread
|Impact on fair value of 10% adverse change                                                    |  | $                                                                       | 0.3      |   |          | $     | (7.3       | )           |  | $ | (3.5       | ) |  | $ | (0.9 | )
|Impact on fair value of 20% adverse change                                                    |  |                                                                         | 0.2      |   |          |       | (14.9      | )           |  |   | (9.3       | ) |  |   | (1.7 | )





|                     |  |      |          |   |      |  |          |      |  |  |          |  
|-------------------- |  | ---- | -------- | - | ---- |  | -------- | ---- |  |  | -------- | -
|December 31,         |  | 2006 |          |   | 2005 |  |          | 2004 | 
|                     |  |      |          |   |      |  |          |      | 
|Prime non-conforming |  |      | 0.0- 1.6 | % |      |  | 0.0- 2.0 | %    |  |  | 0.0- 4.2 | %
|Nonprime             |  |      | 0.1-12.8 |   |      |  | 0.0-16.9 |      |  |  | 0.2-26.1 |  
|Prime second-lien    |  |      | 0.6-2.6  |   |      |  | 0.7-2.8  |      |  |  | 0.6-2.8  |  
|Government           |  |      | 3.6      |   |      |  | 4.9      |      |  |  | 5.4      |  

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                       |                                     |                      |         |              |                  |            |        |            |  |   |     |  | 
|---------------------- | ----------------------------------- | -------------------- | ------- | ------------ | ---------------- | ---------- | ------ | ---------- |  | - | --- |  | 
|                       |                                     |                      |         |              |                  | Year Ended |       
|                       |                                     |                      |         | December 31, |                 
|                       |                                     | At December 31, 2006 |         |              | 2006             |           
|                       |                                     |                      |         |              |                  |           
|                       |                                     | Total Principal      |         |              | Loans 60 Days or |            |        | Net Credit | 
|Type of Mortgage Loan  |                                     | Amount of Loans      |         |              | More Past Due    |            |        | Losses     | 
|                       |                                     |                      |         |              |                  |            |        |            | 
|                       |                                     | (In millions)        |        
|Prime conforming       |                                     | $                    | 3,165   |              |                  | $          | 53     |            |  | $ | 1   | 
|Prime non-conforming   |                                     |                      | 102,081 |              |                  |            | 1,480  |            |  |   | 43  | 
|Nonprime               |                                     |                      | 90,463  |              |                  |            | 12,967 |            |  |   | 849 | 
|Prime second-lien      |                                     |                      | 21,463  |              |                  |            | 238    |            |  |   | 83  | 
|Government             |                                     |                      | 800     |              |                  |            | 437    |            |  |   | 5   | 
|                       |                                     |                      |         |              |                  |            |        |            | 
|Total managed loans(a) |                                     |                      | 217,972 |              |                  | $          | 15,175 |            |  | $ | 981 | 
|                       |                                     |                      |         |              |                  |            |        |            | 
|Less:                  |                                     |                      |         |              |                  |            |        |            |  |   |     | 
|                       | Mortgage loans securitized and sold |                      |         | 121,512      |                  |            |        |            |  |   |     |  | 
|                       | Mortgage loans held for sale        |                      |         | 27,024       |                  |            |        |            |  |   |     |  | 
|                       |                                     |                      |         |              |                  |            |        |            | 
|                       | Mortgage loans held for investment  |                      | $       | 69,436       |                  |            |        |            |  |   |     |  | 
|                       |                                     |                      |         |              |                  |            |        |            | 






|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Total managed loans represent loans retained on the balance
    sheet or that have been securitized and sold, excluding
    securitized loans that the Company continues to service but has
    no other continuing involvement.

|                       |                                     |                      |         |              |                  |            |       |            |  |   |     |  | 
|---------------------- | ----------------------------------- | -------------------- | ------- | ------------ | ---------------- | ---------- | ----- | ---------- |  | - | --- |  | 
|                       |                                     |                      |         |              |                  | Year Ended |      
|                       |                                     |                      |         | December 31, |                 
|                       |                                     | At December 31, 2005 |         |              | 2005             |           
|                       |                                     |                      |         |              |                  |           
|                       |                                     | Total Principal      |         |              | Loans 60 Days or |            |       | Net Credit | 
|Type of Mortgage Loan  |                                     | Amount of Loans      |         |              | More Past Due    |            |       | Losses     | 
|                       |                                     |                      |         |              |                  |            |       |            | 
|                       |                                     | (In millions)        |        
|Prime conforming       |                                     | $                    | 4,396   |              |                  | $          | 29    |            |  | $ |    | 
|Prime non-conforming   |                                     |                      | 67,504  |              |                  |            | 702   |            |  |   | 43  | 
|Nonprime               |                                     |                      | 79,817  |              |                  |            | 7,363 |            |  |   | 801 | 
|Prime second-lien      |                                     |                      | 15,064  |              |                  |            | 177   |            |  |   | 38  | 
|Government             |                                     |                      | 803     |              |                  |            | 411   |            |  |   | 3   | 
|                       |                                     |                      |         |              |                  |            |       |            | 
|Total managed loans(a) |                                     |                      | 167,584 |              |                  | $          | 8,682 |            |  | $ | 885 | 
|                       |                                     |                      |         |              |                  |            |       |            | 
|Less:                  |                                     |                      |         |              |                  |            |       |            |  |   |     | 
|                       | Mortgage loans securitized and sold |                      |         | 79,087       |                  |            |       |            |  |   |     |  | 
|                       | Mortgage loans held for sale        |                      |         | 19,538       |                  |            |       |            |  |   |     |  | 
|                       |                                     |                      |         |              |                  |            |       |            | 
|                       | Mortgage loans held for investment  |                      | $       | 68,959       |                  |            |       |            |  |   |     |  | 
|                       |                                     |                      |         |              |                  |            |       |            | 






|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Total managed loans represent loans retained on the balance
    sheet or that have been securitized and sold, excluding
    securitized loans that the Company continues to service but has
    no other continuing involvement.



|    |                           
|--- | --------------------------
|19. | Variable Interest Entities



IB Finance Holding Company, LLC


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)










Mortgage Warehouse Funding mortgage-related bank-sponsored Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities




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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Warehouse Lending asset-backed




Collateralized Debt Obligations (CDO)




Construction and Real Estate Lending






Other Relationships


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


20.     Other Comprehensive
Income




|                             |                 |                 |         |         |               |   |        |                 |             |       |               |         |   |   |         |         |  
|---------------------------- | --------------- | --------------- | ------- | ------- | ------------- | - | ------ | --------------- | ----------- | ----- | ------------- | ------- | - | - | ------- | ------- | -
|                             |                 | Unrealized Gain |         |         |               |   |        |                 | Accumulated |      
|                             |                 | (Loss) on       |         |         | Foreign       |   |        |                 |             | Other |              
|                             |                 | Available for   |         |         | Currency      |   |        | Unrealized Gain |             |       | Comprehensive |        
|                             |                 | Sale            |         |         | Translation   |   |        | (Loss) on Cash  |             |       | Income        |        
|                             |                 | Securities(a)   |         |         | Adjustment(b) |   |        | Flow Hedges     |             |       | (Loss)        |        
|                             |                 |                 |         |         |               |   |        |                 |             |       |               |        
|                             |                 | (In thousands)  |        
|Balance at January 1, 2004   |                 | $               | (2,665  | )       |               | $ | 26,426 |                 |             | $     | (23,095       | )       |   | $ | 666     |        
|                             | 2004 net change |                 |         | 10,432  |               |   |        | 21,109          |             |       |               | 126,799 |   |   |         | 158,340 |  
|                             |                 |                 |         |         |               |   |        |                 |             |       |               |        
|Balance at December 31, 2004 |                 |                 | 7,767   |         |               |   | 47,535 |                 |             |       | 103,704       |         |   |   | 159,006 |        
|                             | 2005 net change |                 |         | (24,451 | )             |   |        | (33,103         | )           |       |               | 14,254  |   |   |         | (43,300 | )
|                             |                 |                 |         |         |               |   |        |                 |             |       |               |        
|Balance at December 31, 2005 |                 |                 | (16,684 | )       |               |   | 14,432 |                 |             |       | 117,958       |         |   |   | 115,706 |        
|                             | 2006 net change |                 |         | 18,455  |               |   |        | 49,225          |             |       |               | (51,151 | ) |   |         | 16,529  |  
|                             |                 |                 |         |         |               |   |        |                 |             |       |               |        
|Balance at December 31, 2006 |                 | $               | 1,771   |         |               | $ | 63,657 |                 |             | $     | 66,807        |         |   | $ | 132,235 |        
|                             |                 |                 |         |         |               |   |        |                 |             |       |               |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents the after-tax difference between the fair value and
    amortized cost of the available for sale securities portfolio.
    In conjunction with the adoption of SFAS No. 156 on
    January 1, 2006, the Company made a one-time
    reclassification of $927.1 million of available for sale
    securities to trading securities for securities identified as
    offsetting the Companys exposure to changes in the fair
    value of surviving assets or liabilities. The transfer resulted
    in $16.7 million of unrealized loss being transferred to
    retained earnings.
|   
|(b) | Includes after-tax gains and losses on foreign currency
    translation from operations for which the functional currency is
    other than the U.S. dollar. Net change amounts were net of taxes
    totaling $(0.1), $0.1 and $0.1 million for the years ended
    December 31, 2006, 2005 and 2004, respectively.                                                                                                                                                                                                                                                                          



|                                                                                      |  |                |         |   |            |   |        |            |  |   |         |  
|------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ---------- | - | ------ | ---------- |  | - | ------- | -
|Year Ended December 31,                                                               |  | Pretax         |         |   | Tax Effect |   |        | Net of Tax | 
|                                                                                      |  |                |         |   |            |   |        |            | 
|                                                                                      |  | (In thousands) |        
|2006                                                                                  |  |                |         |   |            |   |        |            |  |   |         |  
|Available for sale securities:                                                        |  |                |         |   |            |   |        |            |  |   |         |  
|Net unrealized gains arising during the year                                          |  | $              | 2,557   |   |            | $ | (833   | )          |  | $ | 1,724   |  
|Reclassification of losses included in net income                                     |  |                | 22      |   |            |   | (8     | )          |  |   | 14      |  
|                                                                                      |  |                |         |   |            |   |        |            | 
|Net unrealized gains arising during the year, net of
    reclassification adjustment  |  | $              | 2,579   |   |            | $ | (841   | )          |  | $ | 1,738   |  
|                                                                                      |  |                |         |   |            |   |        |            | 
|Cash flow hedges:                                                                     |  |                |         |   |            |   |        |            |  |   |         |  
|Net unrealized losses arising during the year                                         |  | $              | (91,596 | ) |            |   | 41,992 |            |  | $ | (49,604 | )
|Reclassification of net losses included in net income                                 |  |                | (2,375  | ) |            |   | 828    |            |  |   | (1,547  | )
|                                                                                      |  |                |         |   |            |   |        |            | 
|Net unrealized losses arising during the year, net of
    reclassification adjustment |  | $              | (93,971 | ) |            | $ | 42,820 |            |  | $ | (51,151 | )
|                                                                                      |  |                |         |   |            |   |        |            | 

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


|                                                                                      |  |                |         |   |            |   |         |            |  |   |         |  
|------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ---------- | - | ------- | ---------- |  | - | ------- | -
|Year Ended December 31,                                                               |  | Pretax         |         |   | Tax Effect |   |         | Net of Tax | 
|                                                                                      |  |                |         |   |            |   |         |            | 
|                                                                                      |  | (In thousands) |        
|2005                                                                                  |  |                |         |   |            |   |         |            |  |   |         |  
|Available for sale securities:                                                        |  |                |         |   |            |   |         |            |  |   |         |  
|Net unrealized losses arising during the year                                         |  | $              | (25,742 | ) |            | $ | 9,010   |            |  | $ | (16,732 | )
|Reclassification of net gains included in net income                                  |  |                | (11,780 | ) |            |   | 4,061   |            |  |   | (7,719  | )
|                                                                                      |  |                |         |   |            |   |         |            | 
|Net unrealized losses arising during the year, net of
    reclassification adjustment |  | $              | (37,522 | ) |            | $ | 13,071  |            |  | $ | (24,451 | )
|                                                                                      |  |                |         |   |            |   |         |            | 
|Cash flow hedges:                                                                     |  |                |         |   |            |   |         |            |  |   |         |  
|Net unrealized gains arising during the year                                          |  | $              | 27,136  |   |            | $ | (8,627  | )          |  | $ | 18,509  |  
|Reclassification of net gains included in net income                                  |  |                | (6,548  | ) |            |   | 2,293   |            |  |   | (4,255  | )
|                                                                                      |  |                |         |   |            |   |         |            | 
|Net unrealized gains arising during the year, net of
    reclassification adjustment  |  | $              | 20,588  |   |            | $ | (6,334  | )          |  | $ | 14,254  |  
|                                                                                      |  |                |         |   |            |   |         |            | 
|2004                                                                                  |  |                |         |   |            |   |         |            |  |   |         |  
|Available for sale securities:                                                        |  |                |         |   |            |   |         |            |  |   |         |  
|Net unrealized gains arising during the year                                          |  | $              | 9,691   |   |            | $ | (3,449  | )          |  | $ | 6,242   |  
|Reclassification of losses included in net income                                     |  |                | 6,506   |   |            |   | (2,316  | )          |  |   | 4,190   |  
|                                                                                      |  |                |         |   |            |   |         |            | 
|Net unrealized gains arising during the year, net of
    reclassification adjustment  |  | $              | 16,197  |   |            | $ | (5,765  | )          |  | $ | 10,432  |  
|                                                                                      |  |                |         |   |            |   |         |            | 
|Cash flow hedges:                                                                     |  |                |         |   |            |   |         |            |  |   |         |  
|Net unrealized gains arising during the year                                          |  | $              | 205,261 |   |            | $ | (72,197 | )          |  | $ | 133,064 |  
|Reclassification of net gains included in net income                                  |  |                | (9,665  | ) |            |   | 3,400   |            |  |   | (6,265  | )
|                                                                                      |  |                |         |   |            |   |         |            | 
|Net unrealized gains arising during the year, net of
    reclassification adjustment  |  | $              | 195,596 |   |            | $ | (68,797 | )          |  | $ | 126,799 |  
|                                                                                      |  |                |         |   |            |   |         |            | 

21.     Fair Value of Financial
Instruments




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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                                   |  |                |            |  |            |   |            |          |  |   |            |  |  |   |            | 
|-------------------------------------------------- |  | -------------- | ---------- |  | ---------- | - | ---------- | -------- |  | - | ---------- |  |  | - | ---------- | 
|                                                   |  | 2006           |            |  | 2005       |  
|                                                   |  |                |            |  |            |  
|                                                   |  | Carrying       |            |  | Estimated  |   |            | Carrying |  |   | Estimated  | 
|December 31,                                       |  | Amount         |            |  | Fair Value |   |            | Amount   |  |   | Fair Value | 
|                                                   |  |                |            |  |            |   |            |          |  |   |            | 
|                                                   |  | (In thousands) |           
|Assets                                             |  |                |            |  |            |   |            |          |  |   |            |  |  |   |            | 
|Cash and cash equivalents                          |  | $              | 2,018,847  |  |            | $ | 2,018,847  |          |  | $ | 2,266,753  |  |  | $ | 2,266,753  | 
|Mortgage loans held for sale                       |  |                | 27,007,382 |  |            |   | 27,297,762 |          |  |   | 19,521,566 |  |  |   | 19,589,428 | 
|Trading securities                                 |  |                | 4,562,073  |  |            |   | 4,562,073  |          |  |   | 3,896,008  |  |  |   | 3,896,008  | 
|Available for sale securities                      |  |                | 229,469    |  |            |   | 229,469    |          |  |   | 1,068,937  |  |  |   | 1,068,937  | 
|Mortgage loans held for investment, net            |  |                | 67,927,951 |  |            |   | 68,974,164 |          |  |   | 67,892,660 |  |  |   | 69,061,822 | 
|Lending receivables, net                           |  |                | 14,530,104 |  |            |   | 14,531,788 |          |  |   | 13,401,047 |  |  |   | 13,398,363 | 
|Derivatives  asset position                       |  |                | 585,341    |  |            |   | 585,341    |          |  |   | 681,411    |  |  |   | 681,411    | 
|Other assets                                       |  |                | 3,248,726  |  |            |   | 3,195,354  |          |  |   | 298,021    |  |  |   | 299,005    | 
|Liabilities                                        |  |                |            |  |            |   |            |          |  |   |            |  |  |   |            | 
|Affiliate borrowings                               |  | $              |           |  |            | $ |           |          |  | $ | 5,177,462  |  |  | $ | 5,177,462  | 
|Collateralized borrowings in securitization trusts |  |                | 53,299,518 |  |            |   | 53,204,062 |          |  |   | 56,097,801 |  |  |   | 56,318,710 | 
|Other borrowings                                   |  |                | 59,880,378 |  |            |   | 59,951,118 |          |  |   | 42,300,507 |  |  |   | 42,283,758 | 
|Deposit liabilities                                |  |                | 9,851,026  |  |            |   | 9,829,241  |          |  |   | 4,123,304  |  |  |   | 4,048,344  | 
|Derivatives  liability position                   |  |                | 384,213    |  |            |   | 384,213    |          |  |   | 252,275    |  |  |   | 252,275    | 
|Other liabilities                                  |  |                | 3,792,621  |  |            |   | 3,792,621  |          |  |   |           |  |  |   |           | 



|                                                            |                                         |                |         |           |            |  |      |          |           |  |            |           |  |  |      |   | 
|----------------------------------------------------------- | --------------------------------------- | -------------- | ------- | --------- | ---------- |  | ---- | -------- | --------- |  | ---------- | --------- |  |  | ---- | - | 
|                                                            |                                         | 2006           |         |           | 2005       | 
|                                                            |                                         |                |         |           |            | 
|                                                            |                                         |                |         | Estimated |            |  |      |          | Estimated | 
|December 31,                                                |                                         | Notional       |         |           | Fair Value |  |      | Notional |           |  | Fair Value |          
|                                                            |                                         |                |         |           |            |  |      |          |           |  |            |          
|                                                            |                                         | (In thousands) |        
|Unfunded commitments to extend credit:                      |                                         |                |         |           |            |  |      |          |           |  |            |           |  |  |      |  
|                                                            | Home equity lines of credit             |                | $       | 3,199,259 |            |  | $    |         |           |  | $          | 4,060,452 |  |  | $    |  | 
|                                                            | Warehouse lending receivables           |                |         | 5,815,294 |            |  |      |         |           |  |            | 8,917,946 |  |  |      |  | 
|                                                            | Construction lending receivables        |                |         | 1,683,594 |            |  |      |         |           |  |            | 1,568,951 |  |  |      |  | 
|                                                            | Commercial business lending receivables |                |         | 1,166,003 |            |  |      |         |           |  |            | 730,182   |  |  |      |  | 
|                                                            | Healthcare lending receivables          |                |         | 353,810   |            |  |      |         |           |  |            | 194,372   |  |  |      |  | 
|                                                            | Residential construction loans          |                |         | 351,880   |            |  |      |         |           |  |            | 308,792   |  |  |      |  | 
|Commitments to provide capital to equity method investees   |                                         |                | 264,586 |           |            |  |     |          |           |  | 213,141    |           |  |  |     |  
|Commitments to originate mortgage loans held for investment |                                         |                | 2,911   |           |            |  |     |          |           |  | 94,895     |           |  |  | 298  |  
|Standby letters of credit                                   |                                         |                | 65,264  |           |            |  | (203 | )        |           |  | 48,074     |           |  |  | (220 | )
|Set-aside letters                                           |                                         |                | 167,732 |           |            |  | (508 | )        |           |  | 53,523     |           |  |  | (109 | )



Cash and cash equivalents, lending receivables and other
assets


Mortgage loans held for sale


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Trading and available for sale securities


Mortgage loans held for investment


Derivative financial instruments


Affiliate borrowings


Collateralized borrowings


Other borrowings


Deposit liabilities


Other liabilities


Unfunded commitments to extend credit and commitments to
provide capital to equity method investees


Commitments to originate mortgage loans held for
investment


Standby letters of credit and set-aside
letters


22.     Derivative Instruments




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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






| |                  
| | -----------------
| | Fair Value Hedges



Mortgage servicing rights


R-squared,




Mortgage loans held for sale and commitments to
purchase/originate mortgages R-squared,


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)










Senior unsecured notes




| |                 
| | ----------------
| | Cash Flow Hedges



Cash
Flow Hedges: Measuring the Ineffectiveness of a Cash Flow Hedge
under Paragraph 30(b) When the Shortcut Method Is Not
Applied


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








| |                                                
| | -----------------------------------------------
| | Derivatives Not Designated as Accounting Hedges









| |                              
| | -----------------------------
| | Income Statement Presentation



|                                              |                                       |                |        |        |      |   |        |         |   |   |                                 |        |   |  |                                               
|--------------------------------------------- | ------------------------------------- | -------------- | ------ | ------ | ---- | - | ------ | ------- | - | - | ------------------------------- | ------ | - |  | ----------------------------------------------
|Year Ended December 31,                       |                                       | 2006           |        |        | 2005 |   |        | 2004    |   |   | Income Statement Classification
|                                              |                                       |                |        |        |      |   |        |         |   |   |                                
|                                              |                                       | (In thousands) |        |        |     
|Fair value hedge ineffectiveness gain (loss): |                                       |                |        |        |      |   |        |         |   |   |                                 |        |   | 
|                                              | Mortgage servicing rights             |                | $      |       |      |   | $      | 56,791  |   |   | $                               | 69,888 |   |  | Servicing asset valuation and hedge activities
|                                              | Mortgage loans held for sale          |                |        | (7,292 | )    |   |        | (22,680 | ) |   |                                 | (9,500 | ) |  | Gain on sale of mortgage loans                
|                                              | Senior unsecured notes                |                |        | 286    |      |   |        | (1,553  | ) |   |                                 |       |   |  | Gain (loss) on investment securities          
|Cash flow hedge ineffectiveness gain (loss):  |                                       |                |        |        |      |   |        |         |   |   |                                 |        |   | 
|                                              | Issuance of collateralized borrowings |                |        | 102    |      |   |        | 5,773   |   |   |                                 | (3,535 | ) |  | Interest expense                              
|                                              |                                       |                |        |        |      |   |        |         |   |   |                                
|Total                                         |                                       | $              | (6,904 | )      |      | $ | 38,331 |         |   | $ | 56,853                          |        |   | 
|                                              |                                       |                |        |        |      |   |        |         |   |   |                                



|                                                                                                 |  |                |       |  |      |   |        |      |  |   |         | 
|------------------------------------------------------------------------------------------------ |  | -------------- | ----- |  | ---- | - | ------ | ---- |  | - | ------- | 
|Year Ended December 31,                                                                          |  | 2006           |       |  | 2005 |   |        | 2004 | 
|                                                                                                 |  |                |       |  |      |   |        |      | 
|                                                                                                 |  | (In thousands) |      
|Net gain on fair value hedges excluded from assessment of
    effectiveness (time component)     |  | $              |      |  |      | $ | 59,233 |      |  | $ | 180,414 | 
|Expected reclassifications from other comprehensive income to
    earnings in the next 12 months |  |                | 8,543 |  |      |   | 10,716 |      |  |   | 101,473 | 

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


23.     Guarantees, Commitments, and
Contingencies




| |           
| | ----------
| | Guarantees



|                                       |  |                |           |          |              |   |       |           |          |   |              |  |  |   |       | 
|-------------------------------------- |  | -------------- | --------- | -------- | ------------ | - | ----- | --------- | -------- | - | ------------ |  |  | - | ----- | 
|                                       |  | 2006           |           |          | 2005         |  
|                                       |  |                |           |          |              |  
|                                       |  |                |           | Carrying |              |   |       |           | Carrying |  
|                                       |  | Maximum        |           |          | Value        |   |       | Maximum   |          |   | Value        | 
|December 31,                           |  | Liability      |           |          | of Liability |   |       | Liability |          |   | of Liability | 
|                                       |  |                |           |          |              |   |       |           |          |   |              | 
|                                       |  | (In thousands) |          
|Standby letters of credit              |  | $              | 65,264    |          |              | $ | 203   |           |          | $ | 48,074       |  |  | $ | 220   | 
|HLTV and international securitizations |  |                | 107,765   |          |              |   |      |           |          |   | 204,637      |  |  |   | 574   | 
|Agency loan program                    |  |                | 6,390,481 |          |              |   |      |           |          |   | 6,196,091    |  |  |   |      | 
|Servicing advances                     |  |                | *         |          |              |   | 3,211 |           |          |   | *            |  |  |   | 3,421 | 
|Set-aside letters                      |  |                | 167,732   |          |              |   | 508   |           |          |   | 53,523       |  |  |   | 109   | 
|Repurchase guarantees                  |  |                | 204,278   |          |              |   | 219   |           |          |   | 256,335      |  |  |   | 96    | 
|Credit enhancement guarantees          |  |                | 4,246     |          |              |   | 66    |           |          |   | 24,894       |  |  |   | 335   | 
|Performance guarantees                 |  |                | 3,252     |          |              |   |      |           |          |   | 4,264        |  |  |   |      | 
|Other                                  |  |                | 47,698    |          |              |   |      |           |          |   | 47,654       |  |  |   |      | 






|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The maximum obligation for servicing advances cannot be
    determined. At any point in time, the maximum obligation would
    be the difference between the amount advanced to the owners of
    the mortgage loans and the amount received from mortgagees.

Standby letters of credit


HLTV and international securitizations




Agency loan program


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Third-party debt guarantees


Set-aside letters


Repurchase guarantees


Credit enhancement guarantees


Performance guarantees


Other






| |                              
| | -----------------------------
| | Commitments and Contingencies



|                         |  |                |         | 
|------------------------ |  | -------------- | ------- | 
|Year Ending December 31, |  |               
|                         |  |               
|                         |  | (In thousands) |        
|2007                     |  | $              | 108,827 | 
|2008                     |  |                | 83,579  | 
|2009                     |  |                | 56,044  | 
|2010                     |  |                | 43,263  | 
|2011                     |  |                | 41,010  | 
|2012 and thereafter      |  |                | 160,172 | 
|                         |  |                |        
|                         |  | $              | 492,895 | 
|                         |  |                |        



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




24.     Related Party
Transactions
















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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








25.     Mortgage Loans Serviced




|                     |       |                       |           |           |           |   |           |           |  |         |                 |   |         |         |     |  |  |  |      |   | 
|-------------------- | ----- | --------------------- | --------- | --------- | --------- | - | --------- | --------- |  | ------- | --------------- | - | ------- | ------- | --- |  |  |  | ---- | - | 
|                     |       |                       |           |           |           |   |           | Weighted- |  |         | Weighted-       |  
|                     |       |                       |           | Unpaid    |           |   | Weighted- |           |  | Average |                 |   | Average |        
|                     |       | Number                |           |           | Principal |   |           | Average   |  |         | Remaining       |   |         | Service |    
|                     |       | of Loans              |           |           | Balance   |   |           | Coupon    |  |         | Maturity Months |   |         | Fees    |    
|                     |       |                       |           |           |           |   |           |           |  |         |                 |   |         |         |    
|                     |       | (Dollars in millions) |          
|Prime conforming     |       |                       | 1,456,344 |           |           | $ | 203,927   |           |  |         | 5.99            | % |         |         | 297 |  |  |  | 0.45 | %
|Prime non-conforming |       |                       | 404,969   |           |           |   | 118,928   |           |  |         | 6.24            |   |         |         | 306 |  |  |  | 0.25 |  
|Government           |       |                       | 181,563   |           |           |   | 18,843    |           |  |         | 6.16            |   |         |         | 319 |  |  |  | 0.48 |  
|Nonprime             |       |                       | 498,346   |           |           |   | 74,133    |           |  |         | 7.87            |   |         |         | 316 |  |  |  | 0.33 |  
|Prime second-lien    |       |                       | 785,539   |           |           |   | 32,770    |           |  |         | 9.48            |   |         |         | 222 |  |  |  | 0.33 |  
|                     |       |                       |           |           |           |   |           |           |  |         |                 |   |         |         |    
|                     | Total |                       |           | 3,326,761 |           |   | $         | 448,601   |  |         |                 |   |         |         |     |  |  |  |      |   | 
|                     |       |                       |           |           |           |   |           |           |  |         |                 |   |         |         |    



|               |  |  |       |  
|-------------- |  |  | ----- | -
|California     |  |  | 20.4  | %
|Florida        |  |  | 6.3   |  
|United Kingdom |  |  | 5.3   |  
|Michigan       |  |  | 4.1   |  
|Texas          |  |  | 4.0   |  
|All other      |  |  | 59.9  |  
|               |  |  |      
|Total          |  |  | 100.0 | %
|               |  |  |      





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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




26.     Segment Information






|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              |  |   |             |   |  |   |             |  
|--------------------------------------------------------------------------- |  | -------------- | ---------- | ----------- | ------- | - | ---------- | ------- |  | ------------- | --------- | - |  | ------------- | ---------- | - | ------------ | - | ---------- | ------------ |  | - | ----------- | - |  | - | ----------- | -
|                                                                            |  |                |            | Residential |         |   | Business   |         |  | International |           |   |  |               |            |   |             
|                                                                            |  | GMAC           |            |             | Capital |   |            | Capital |  |               | Business  |   |  | Corporate and |            |   |              |   |           
|Year Ended December 31,                                                     |  | Residential    |            |             | Group   |   |            | Group   |  |               | Group     |   |  | Other         |            |   | Eliminations |   |            | Consolidated | 
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|                                                                            |  | (In thousands) |           
|2006                                                                        |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              |  |   |             |   |  |   |             |  
|Net interest income                                                         |  | $              | 222,411    |             |         | $ | 1,195,041  |         |  | $             | 88,778    |   |  | $             | 172,161    |   |              | $ | 30,415     |              |  | $ | 8           |   |  | $ | 1,708,814   |  
|Provision for loan losses                                                   |  |                | (18,446    | )           |         |   | (1,254,486 | )       |  |               | (28,414   | ) |  |               | (32,383    | ) |              |   | (355       | )            |  |   |            |   |  |   | (1,334,084  | )
|Other revenue                                                               |  |                | 987,700    |             |         |   | 274,053    |         |  |               | 655,850   |   |  |               | 322,879    |   |              |   | 428,124    |              |  |   | (20,827     | ) |  |   | 2,647,779   |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Total net revenue                                                           |  |                | 1,191,665  |             |         |   | 214,608    |         |  |               | 716,214   |   |  |               | 462,657    |   |              |   | 458,184    |              |  |   | (20,819     | ) |  |   | 3,022,509   |  
|Operating expenses                                                          |  |                | 937,476    |             |         |   | 942,817    |         |  |               | 71,089    |   |  |               | 245,979    |   |              |   | 407,959    |              |  |   | (8,385      | ) |  |   | 2,596,935   |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Income (loss) before income tax expense (benefit) and minority
    interest |  |                | 254,189    |             |         |   | (728,209   | )       |  |               | 645,125   |   |  |               | 216,678    |   |              |   | 50,225     |              |  |   | (12,434     | ) |  |   | 425,574     |  
|Income tax expense (benefit)                                                |  |                | 121,529    |             |         |   | (278,176   | )       |  |               | 246,438   |   |  |               | 46,638     |   |              |   | (426,030   | )            |  |   | 428         |   |  |   | (289,173    | )
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Income (loss) before minority interest                                      |  |                | 132,660    |             |         |   | (450,033   | )       |  |               | 398,687   |   |  |               | 170,040    |   |              |   | 476,255    |              |  |   | (12,862     | ) |  |   | 714,747     |  
|Minority interest                                                           |  |                |           |             |         |   |           |         |  |               |          |   |  |               |           |   |              |   | 9,654      |              |  |   |            |   |  |   | 9,654       |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Net income (loss)                                                           |  | $              | 132,660    |             |         | $ | (450,033   | )       |  | $             | 398,687   |   |  | $             | 170,040    |   |              | $ | 466,601    |              |  | $ | (12,862     | ) |  | $ | 705,093     |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Total assets                                                                |  | $              | 26,751,043 |             |         | $ | 80,945,450 |         |  | $             | 7,476,675 |   |  | $             | 13,982,377 |   |              | $ | 28,699,599 |              |  | $ | (22,268,325 | ) |  | $ | 135,586,819 |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Net interest income (expense) from other segments                           |  | $              | (291,092   | )           |         | $ | (259,324   | )       |  | $             | (282,214  | ) |  | $             | (52,207    | ) |              | $ | 884,829    |              |  | $ | 8           |   |  | $ |            |  
|                                                                            |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              |  |   |             |   |  |   |             |  
|------------------------------------------------- |  | -------------- | ---------- | ----------- | ------- | - | ---------- | ------- |  | ------------- | --------- | - |  | ------------- | ---------- | - | ------------ | - | ---------- | ------------ |  | - | ----------- | - |  | - | ----------- | -
|                                                  |  |                |            | Residential |         |   | Business   |         |  | International |           |   |  |               |            |   |             
|                                                  |  | GMAC           |            |             | Capital |   |            | Capital |  |               | Business  |   |  | Corporate and |            |   |              |   |           
|Year Ended December 31,                           |  | Residential    |            |             | Group   |   |            | Group   |  |               | Group     |   |  | Other         |            |   | Eliminations |   |            | Consolidated | 
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|                                                  |  | (In thousands) |           
|2005                                              |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              |  |   |             |   |  |   |             |  
|Net interest income (expense)                     |  | $              | 289,838    |             |         | $ | 1,336,230  |         |  | $             | 147,894   |   |  | $             | 152,156    |   |              | $ | (1,123     | )            |  | $ |            |   |  | $ | 1,924,995   |  
|Provision for loan losses                         |  |                | (3,034     | )           |         |   | (621,272   | )       |  |               | (25,847   | ) |  |               | (1,678     | ) |              |   | 35         |              |  |   |            |   |  |   | (651,796    | )
|Other revenue                                     |  |                | 1,199,537  |             |         |   | 741,321    |         |  |               | 280,552   |   |  |               | 232,068    |   |              |   | 509,697    |              |  |   | (1,114      | ) |  |   | 2,962,061   |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Total net revenue                                 |  |                | 1,486,341  |             |         |   | 1,456,279  |         |  |               | 402,599   |   |  |               | 382,546    |   |              |   | 508,609    |              |  |   | (1,114      | ) |  |   | 4,235,260   |  
|Operating expenses                                |  |                | 954,314    |             |         |   | 822,629    |         |  |               | 81,213    |   |  |               | 253,298    |   |              |   | 496,880    |              |  |   |            |   |  |   | 2,608,334   |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Income before income tax expense                  |  |                | 532,027    |             |         |   | 633,650    |         |  |               | 321,386   |   |  |               | 129,248    |   |              |   | 11,729     |              |  |   | (1,114      | ) |  |   | 1,626,926   |  
|Income tax expense (benefit)                      |  |                | 224,599    |             |         |   | 238,099    |         |  |               | 120,809   |   |  |               | 39,159     |   |              |   | (15,938    | )            |  |   | (428        | ) |  |   | 606,300     |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Net income                                        |  | $              | 307,428    |             |         | $ | 395,551    |         |  | $             | 200,577   |   |  | $             | 90,089     |   |              | $ | 27,667     |              |  | $ | (686        | ) |  | $ | 1,020,626   |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Total assets                                      |  | $              | 23,058,446 |             |         | $ | 77,225,029 |         |  | $             | 5,545,713 |   |  | $             | 10,694,661 |   |              | $ | 19,308,813 |              |  | $ | (16,947,570 | ) |  | $ | 118,885,092 |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 
|Net interest income (expense) from other segments |  | $              | (135,779   | )           |         | $ | (169,371   | )       |  | $             | (144,566  | ) |  | $             | 2,709      |   |              | $ | 447,007    |              |  | $ |            |   |  | $ |            |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |            |   |              |   |            |              | 

|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              |  |   |        |   |  |   |            |  
|------------------------------------------------- |  | -------------- | ---------- | ----------- | ------- | - | ---------- | ------- |  | ------------- | --------- | - |  | ------------- | --------- | - | ------------ | - | -------- | ------------ |  | - | ------ | - |  | - | ---------- | -
|                                                  |  |                |            | Residential |         |   | Business   |         |  | International |           |   |  |               |           |   |             
|                                                  |  | GMAC           |            |             | Capital |   |            | Capital |  |               | Business  |   |  | Corporate and |           |   |              |   |         
|Year Ended December 31,                           |  | Residential    |            |             | Group   |   |            | Group   |  |               | Group     |   |  | Other         |           |   | Eliminations |   |          | Consolidated | 
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|                                                  |  | (In thousands) |           
|2004                                              |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              |  |   |        |   |  |   |            |  
|Net interest income (expense)                     |  | $              | 327,610    |             |         | $ | 2,050,190  |         |  | $             | 124,175   |   |  | $             | 105,474   |   |              | $ | (21,550  | )            |  | $ |       |   |  | $ | 2,585,899  |  
|Provision for loan losses                         |  |                | 2,763      |             |         |   | (819,971   | )       |  |               | (20,984   | ) |  |               | (4,494    | ) |              |   | (213     | )            |  |   |       |   |  |   | (842,899   | )
|Other revenue                                     |  |                | 942,554    |             |         |   | 406,140    |         |  |               | 208,799   |   |  |               | 176,861   |   |              |   | 489,372  |              |  |   |       |   |  |   | 2,223,726  |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|Total net revenue                                 |  |                | 1,272,927  |             |         |   | 1,636,359  |         |  |               | 311,990   |   |  |               | 277,841   |   |              |   | 467,609  |              |  |   |       |   |  |   | 3,966,726  |  
|Operating expenses                                |  |                | 767,416    |             |         |   | 844,678    |         |  |               | 71,789    |   |  |               | 200,448   |   |              |   | 472,043  |              |  |   |       |   |  |   | 2,356,374  |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|Income before income tax expense                  |  |                | 505,511    |             |         |   | 791,681    |         |  |               | 240,201   |   |  |               | 77,393    |   |              |   | (4,434   | )            |  |   |       |   |  |   | 1,610,352  |  
|Income tax expense (benefit)                      |  |                | 224,950    |             |         |   | 302,796    |         |  |               | 91,877    |   |  |               | 26,075    |   |              |   | (3,558   | )            |  |   |       |   |  |   | 642,140    |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|Net income (loss)                                 |  | $              | 280,561    |             |         | $ | 488,885    |         |  | $             | 148,324   |   |  | $             | 51,318    |   |              | $ | (876     | )            |  | $ |       |   |  | $ | 968,212    |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|Total assets                                      |  | $              | 15,325,139 |             |         | $ | 66,856,173 |         |  | $             | 4,429,835 |   |  | $             | 8,133,785 |   |              | $ | (393,634 | )            |  | $ | (1,834 | ) |  | $ | 94,349,464 |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 
|Net interest income (expense) from other segments |  | $              |           |             |         | $ | (98,647    | )       |  | $             | (71,937   | ) |  | $             | (1,808    | ) |              | $ | 172,392  |              |  | $ |       |   |  | $ |           |  
|                                                  |  |                |            |             |         |   |            |         |  |               |           |   |  |               |           |   |              |   |          |              | 



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


|                        |  |                |           |            |        |   |           | 
|----------------------- |  | -------------- | --------- | ---------- | ------ | - | --------- | 
|                        |  |                |           | Long-Lived |       
|Year Ended December 31, |  | Revenue        |           |            | Assets |  
|                        |  |                |           |            |        |  
|                        |  | (In thousands) |          
|2006                    |  |                |           |            |        |   |           | 
|Europe                  |  | $              | 387,936   |            |        | $ | 34,679    | 
|Canada                  |  |                | 49,103    |            |        |   | 8,768     | 
|Latin America           |  |                | 32,435    |            |        |   | 1,833     | 
|Asia Pacific            |  |                | 2,778     |            |        |   | 1,687     | 
|                        |  |                |           |            |        |  
|Total foreign           |  |                | 472,252   |            |        |   | 46,967    | 
|Total domestic          |  |                | 2,550,257 |            |        |   | 2,212,118 | 
|                        |  |                |           |            |        |  
|Total                   |  | $              | 3,022,509 |            |        | $ | 2,259,085 | 
|                        |  |                |           |            |        |  
|2005                    |  |                |           |            |        |   |           | 
|Europe                  |  | $              | 321,555   |            |        | $ | 31,040    | 
|Canada                  |  |                | 35,272    |            |        |   | 1,084     | 
|Latin America           |  |                | 99,756    |            |        |   | 773       | 
|Asia Pacific            |  |                | 1,207     |            |        |   | 100       | 
|                        |  |                |           |            |        |  
|Total foreign           |  |                | 457,790   |            |        |   | 32,997    | 
|Total domestic          |  |                | 3,777,470 |            |        |   | 162,830   | 
|                        |  |                |           |            |        |  
|Total                   |  | $              | 4,235,260 |            |        | $ | 195,827   | 
|                        |  |                |           |            |        |  
|2004                    |  |                |           |            |        |   |           | 
|Europe                  |  | $              | 235,843   |            |        | $ | 39,580    | 
|Canada                  |  |                | 25,665    |            |        |   | 983       | 
|Latin America           |  |                | 51,029    |            |        |   | 901       | 
|Asia Pacific            |  |                | 931       |            |        |   | 133       | 
|                        |  |                |           |            |        |  
|Total foreign           |  |                | 313,468   |            |        |   | 41,597    | 
|Total domestic          |  |                | 3,653,258 |            |        |   | 145,966   | 
|                        |  |                |           |            |        |  
|Total                   |  | $              | 3,966,726 |            |        | $ | 187,563   | 
|                        |  |                |           |            |        |  



|    |                   
|--- | ------------------
|27. | Regulatory Matters







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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                                            |  |                |         |               |                  |  |       |        |  |   |         |  |  |  |       | 
|----------------------------------------------------------- |  | -------------- | ------- | ------------- | ---------------- |  | ----- | ------ |  | - | ------- |  |  |  | ----- | 
|                                                            |  |                |         | Minimum to be |                 
|                                                            |  | Actual         |         |               | Well Capitalized | 
|                                                            |  |                |         |               |                  | 
|December 31, 2006                                           |  | Amount         |         |               | Ratio            |  |       | Amount |  |   | Ratio   | 
|                                                            |  |                |         |               |                  |  |       |        |  |   |         | 
|                                                            |  | (In thousands) |         |               | (In thousands)   | 
|Total capital (Tier 1 + Tier 2) to risk
    weighted assets |  | $              | 2,197.7 |               |                  |  | 15.1% |        |  | $ | 1,460.2 |  |  |  | 10.0% | 
|Tier 1 capital to risk weighted assets                      |  |                | 2,148.2 |               |                  |  | 14.7% |        |  |   | 876.1   |  |  |  | 6.0%  | 
|Tier 1 capital to average assets (leveraged ratio)          |  |                | 2,148.2 |               |                  |  | 10.7% |        |  |   | 1,599.7 |  |  |  | 8.0%  | 



|    |                                   
|--- | ----------------------------------
|28. | Supplemental Financial Information





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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2006


|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |            |             | 
|----------------------------------------------- | -------------------------------------------------- | ---------------- | ---------- | ---------- | ------------ | - | ------------- | ------------ | ---------- | - | ------------ | ---------- | ---------- | ------------ | ----------- | ----------- | ----------- | - | ----------- | ---------- | ----------- | 
|                                                |                                                    |                  |            | Guarantor  |              |   | Non-Guarantor |              |            |   |              |           
|                                                |                                                    | Parent           |            |            | Subsidiaries |   |               | Subsidiaries |            |   | Eliminations |            |            | Consolidated |            
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                                |                                                    | (In thousands)   |           
|ASSETS                                          |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Cash and cash equivalents                       |                                                    | $                | 832,600    |            |              | $ | 456,895       |              |            | $ | 756,225      |            |            | $            | (26,873     | )           |             | $ | 2,018,847   |           
|Mortgage loans held for sale                    |                                                    |                  |           |            |              |   | 8,064,094     |              |            |   | 18,944,066   |            |            |              | (778        | )           |             |   | 27,007,382  |           
|Trading securities                              |                                                    |                  |           |            |              |   | 2,234,692     |              |            |   | 2,327,381    |            |            |              |            |             |             |   | 4,562,073   |           
|Available for sale securities                   |                                                    |                  |           |            |              |   | 504,333       |              |            |   | 223,172      |            |            |              | (498,036    | )           |             |   | 229,469     |           
|Mortgage loans held for investment, net         |                                                    |                  |           |            |              |   | 2,224,615     |              |            |   | 65,779,753   |            |            |              | (76,417     | )           |             |   | 67,927,951  |           
|Lending receivables, net                        |                                                    |                  |           |            |              |   | 2,875,468     |              |            |   | 11,653,240   |            |            |              | 1,396       |             |             |   | 14,530,104  |           
|Mortgage servicing rights                       |                                                    |                  |           |            |              |   | 4,917,319     |              |            |   | 12,742       |            |            |              |            |             |             |   | 4,930,061   |           
|Accounts receivable                             |                                                    |                  | 3,450      |            |              |   | 1,618,758     |              |            |   | 1,458,948    |            |            |              | (519,956    | )           |             |   | 2,561,200   |           
|Investments in real estate and other            |                                                    |                  |           |            |              |   | 124,394       |              |            |   | 2,497,755    |            |            |              |            |             |             |   | 2,622,149   |           
|Goodwill                                        |                                                    |                  |           |            |              |   | 218,803       |              |            |   | 252,660      |            |            |              |            |             |             |   | 471,463     |           
|Other assets                                    |                                                    |                  | 305,541    |            |              |   | 6,226,889     |              |            |   | 7,124,657    |            |            |              | (4,930,967  | )           |             |   | 8,726,120   |           
|Investment in and loans to subsidiaries         |                                                    |                  | 22,107,251 |            |              |   | 4,328,440     |              |            |   |             |            |            |              | (26,435,691 | )           |             |   |            |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total assets                                    |                                                    | $                | 23,248,842 |            |              | $ | 33,794,700    |              |            | $ | 111,030,599  |            |            | $            | (32,487,322 | )           |             | $ | 135,586,819 |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                               
|LIABILITIES                                     |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Borrowings:                                     |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|                                                | Affiliate borrowings                               |                  | $          |           |              |   | $             | 12,688,000   |            |   | $            | 1,767,326  |            |              | $           | (14,455,326 | )           |   | $           |           |            
|                                                | Collateralized borrowings in securitization trusts |                  |            |           |              |   |               |             |            |   |              | 53,299,518 |            |              |             |            |             |   |             | 53,299,518 |            
|                                                | Other borrowings                                   |                  |            | 15,233,823 |              |   |               | 10,895,543   |            |   |              | 34,767,610 |            |              |             | (1,016,598  | )           |   |             | 59,880,378 |            
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                                |                                                    | Total borrowings |            |            | 15,233,823   |   |               |              | 23,583,543 |   |              |            | 89,834,454 |              |             |             | (15,471,924 | ) |             |            | 113,179,896 | 
|Deposit liabilities                             |                                                    |                  |           |            |              |   |              |              |            |   | 9,892,899    |            |            |              | (41,873     | )           |             |   | 9,851,026   |           
|Other liabilities                               |                                                    |                  | 392,906    |            |              |   | 2,559,232     |              |            |   | 6,366,431    |            |            |              | (4,944,563  | )           |             |   | 4,374,006   |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities                               |                                                    |                  | 15,626,729 |            |              |   | 26,142,775    |              |            |   | 106,093,784  |            |            |              | (20,458,360 | )           |             |   | 127,404,928 |           
|Minority interest                               |                                                    |                  |           |            |              |   |              |              |            |   | 559,778      |            |            |              |            |             |             |   | 559,778     |           
|                                               
|EQUITY                                          |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Common stock and paid-in capital                |                                                    |                  |           |            |              |   | 1             |              |            |   | 163,665      |            |            |              | (163,666    | )           |             |   |            |           
|Members interest                               |                                                    |                  | 3,837,943  |            |              |   | 4,459,598     |              |            |   | 2,610,663    |            |            |              | (7,070,261  | )           |             |   | 3,837,943   |           
|Retained earnings                               |                                                    |                  | 3,651,935  |            |              |   | 3,060,108     |              |            |   | 1,472,143    |            |            |              | (4,532,251  | )           |             |   | 3,651,935   |           
|Accumulated other comprehensive income          |                                                    |                  | 132,235    |            |              |   | 132,218       |              |            |   | 130,566      |            |            |              | (262,784    | )           |             |   | 132,235     |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total equity                                    |                                                    |                  | 7,622,113  |            |              |   | 7,651,925     |              |            |   | 4,377,037    |            |            |              | (12,028,962 | )           |             |   | 7,622,113   |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities, minority interest and equity |                                                    | $                | 23,248,842 |            |              | $ | 33,794,700    |              |            | $ | 111,030,599  |            |            | $            | (32,487,322 | )           |             | $ | 135,586,819 |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2005


|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |            |             | 
|------------------------------------------ | -------------------------------------------------- | ---------------- | ---------- | --------- | ------------ | - | ------------- | ------------ | ---------- | - | ------------ | ---------- | ---------- | ------------ | ----------- | ----------- | ----------- | - | ----------- | ---------- | ----------- | 
|                                           |                                                    |                  |            | Guarantor |              |   | Non-Guarantor |              |            |   |              |           
|                                           |                                                    | Parent           |            |           | Subsidiaries |   |               | Subsidiaries |            |   | Eliminations |            |            | Consolidated |            
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|                                           |                                                    | (In thousands)   |           
|ASSETS                                     |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Cash and cash equivalents                  |                                                    | $                | 1,626,814  |           |              | $ | 158,167       |              |            | $ | 556,252      |            |            | $            | (74,480     | )           |             | $ | 2,266,753   |           
|Mortgage loans held for sale               |                                                    |                  |           |           |              |   | 5,681,618     |              |            |   | 13,839,159   |            |            |              | 789         |             |             |   | 19,521,566  |           
|Trading securities                         |                                                    |                  |           |           |              |   | 2,538,042     |              |            |   | 1,357,966    |            |            |              |            |             |             |   | 3,896,008   |           
|Available for sale securities              |                                                    |                  |           |           |              |   | 1,733,792     |              |            |   | 135,434      |            |            |              | (800,289    | )           |             |   | 1,068,937   |           
|Mortgage loans held for investment, net    |                                                    |                  |           |           |              |   | 3,368,743     |              |            |   | 64,609,179   |            |            |              | (85,262     | )           |             |   | 67,892,660  |           
|Lending receivables, net                   |                                                    |                  |           |           |              |   | 1,708,764     |              |            |   | 11,691,200   |            |            |              | 1,083       |             |             |   | 13,401,047  |           
|Mortgage servicing rights, net             |                                                    |                  |           |           |              |   | 4,010,165     |              |            |   | 4,850        |            |            |              |            |             |             |   | 4,015,015   |           
|Accounts receivable                        |                                                    |                  | 6,661      |           |              |   | 984,269       |              |            |   | 1,179,505    |            |            |              | (219,225    | )           |             |   | 1,951,210   |           
|Investments in real estate and other       |                                                    |                  |           |           |              |   | 261,287       |              |            |   | 1,594,011    |            |            |              |            |             |             |   | 1,855,298   |           
|Goodwill                                   |                                                    |                  |           |           |              |   | 218,803       |              |            |   | 240,965      |            |            |              |            |             |             |   | 459,768     |           
|Other assets                               |                                                    |                  | 95,129     |           |              |   | 5,856,223     |              |            |   | 1,652,992    |            |            |              | (5,047,514  | )           |             |   | 2,556,830   |           
|Investment in and loans to subsidiaries    |                                                    |                  | 16,885,741 |           |              |   | 3,635,143     |              |            |   |             |            |            |              | (20,520,884 | )           |             |   |            |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|Total assets                               |                                                    | $                | 18,614,345 |           |              | $ | 30,155,016    |              |            | $ | 96,861,513   |            |            | $            | (26,745,782 | )           |             | $ | 118,885,092 |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|                                          
|LIABILITIES                                |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Borrowings:                                |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|                                           | Affiliate borrowings                               |                  | $          | 4,130,000 |              |   | $             | 10,427,971   |            |   | $            | 1,047,462  |            |              | $           | (10,427,971 | )           |   | $           | 5,177,462  |            
|                                           | Collateralized borrowings in securitization trusts |                  |            |          |              |   |               |             |            |   |              | 56,097,801 |            |              |             |            |             |   |             | 56,097,801 |            
|                                           | Other borrowings                                   |                  |            | 6,900,519 |              |   |               | 10,142,507   |            |   |              | 26,275,899 |            |              |             | (1,018,418  | )           |   |             | 42,300,507 |            
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|                                           |                                                    | Total borrowings |            |           | 11,030,519   |   |               |              | 20,570,478 |   |              |            | 83,421,162 |              |             |             | (11,446,389 | ) |             |            | 103,575,770 | 
|Deposit liabilities                        |                                                    |                  |           |           |              |   |              |              |            |   | 4,212,784    |            |            |              | (89,480     | )           |             |   | 4,123,304   |           
|Other liabilities                          |                                                    |                  | 119,856    |           |              |   | 3,126,768     |              |            |   | 5,597,193    |            |            |              | (5,121,769  | )           |             |   | 3,722,048   |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities                          |                                                    |                  | 11,150,375 |           |              |   | 23,697,246    |              |            |   | 93,231,139   |            |            |              | (16,657,638 | )           |             |   | 111,421,122 |           
|                                          
|STOCKHOLDERS EQUITY                       |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|Common stock and paid-in capital           |                                                    |                  | 3,367,677  |           |              |   | 2,367,676     |              |            |   | 1,333,427    |            |            |              | (3,701,103  | )           |             |   | 3,367,677   |           
|Retained earnings                          |                                                    |                  | 3,980,587  |           |              |   | 3,974,388     |              |            |   | 2,165,466    |            |            |              | (6,139,854  | )           |             |   | 3,980,587   |           
|Accumulated other comprehensive income     |                                                    |                  | 115,706    |           |              |   | 115,706       |              |            |   | 131,481      |            |            |              | (247,187    | )           |             |   | 115,706     |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|Total stockholders equity                 |                                                    |                  | 7,463,970  |           |              |   | 6,457,770     |              |            |   | 3,630,374    |            |            |              | (10,088,144 | )           |             |   | 7,463,970   |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities and stockholders equity |                                                    | $                | 18,614,345 |           |              | $ | 30,155,016    |              |            | $ | 96,861,513   |            |            | $            | (26,745,782 | )           |             | $ | 118,885,092 |           
|                                           |                                                    |                  |            |           |              |   |               |              |            |   |              |            |            |              |            

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Year Ended December 31, 2006


|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |            |  
|------------------------------------------------------------------------ |  | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | -------- | - |  | - | ---------- | -
|                                                                         |  |                |         | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                         |  | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |         
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|                                                                         |  | (In thousands) |        
|Revenue                                                                  |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |            |  
|Interest income                                                          |  | $              | 919,261 |           |              | $ | 1,503,331     |              |  | $ | 6,608,713    |   |  | $            | (862,271 | ) |  | $ | 8,169,034  |  
|Interest expense                                                         |  |                | 916,433 |           |              |   | 1,059,986     |              |  |   | 5,390,501    |   |  |              | (906,700 | ) |  |   | 6,460,220  |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net interest income                                                      |  |                | 2,828   |           |              |   | 443,345       |              |  |   | 1,218,212    |   |  |              | 44,429   |   |  |   | 1,708,814  |  
|Provision for loan losses                                                |  |                |        |           |              |   | 286,903       |              |  |   | 1,049,703    |   |  |              | (2,522   | ) |  |   | 1,334,084  |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net interest income after provision for loan losses                      |  |                | 2,828   |           |              |   | 156,442       |              |  |   | 168,509      |   |  |              | 46,951   |   |  |   | 374,730    |  
|Gain (loss) on sale of mortgage loans, net                               |  |                | (1,283  | )         |              |   | 687,199       |              |  |   | 241,872      |   |  |              | (37,572  | ) |  |   | 890,216    |  
|Servicing fees                                                           |  |                |        |           |              |   | 1,598,017     |              |  |   | (6,903       | ) |  |              | (7,440   | ) |  |   | 1,583,674  |  
|Servicing asset valuation and hedge activities, net                      |  |                |        |           |              |   | (1,098,374    | )            |  |   | (1,858       | ) |  |              |         |   |  |   | (1,100,232 | )
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net servicing fees                                                       |  |                |        |           |              |   | 499,643       |              |  |   | (8,761       | ) |  |              | (7,440   | ) |  |   | 483,442    |  
|Gain (loss) on investment securities, net                                |  |                | 286     |           |              |   | (65,288       | )            |  |   | 133,667      |   |  |              |         |   |  |   | 68,665     |  
|Real estate related revenues                                             |  |                |        |           |              |   | 54,179        |              |  |   | 538,861      |   |  |              |         |   |  |   | 593,040    |  
|Gain on sale of equity investments                                       |  |                |        |           |              |   | 414,508       |              |  |   |             |   |  |              |         |   |  |   | 414,508    |  
|Other income                                                             |  |                | 2,096   |           |              |   | 180,173       |              |  |   | 110,972      |   |  |              | (95,333  | ) |  |   | 197,908    |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Total net revenue                                                        |  |                | 3,927   |           |              |   | 1,926,856     |              |  |   | 1,185,120    |   |  |              | (93,394  | ) |  |   | 3,022,509  |  
|                                                                        
|Expenses                                                                 |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |            |  
|Compensation and benefits                                                |  |                |        |           |              |   | 695,093       |              |  |   | 511,246      |   |  |              |         |   |  |   | 1,206,339  |  
|Professional fees                                                        |  |                |        |           |              |   | 216,873       |              |  |   | 56,183       |   |  |              |         |   |  |   | 273,056    |  
|Data processing and telecommunications                                   |  |                |        |           |              |   | 135,916       |              |  |   | 53,236       |   |  |              |         |   |  |   | 189,152    |  
|Advertising                                                              |  |                |        |           |              |   | 117,687       |              |  |   | 35,105       |   |  |              |         |   |  |   | 152,792    |  
|Occupancy                                                                |  |                |        |           |              |   | 86,270        |              |  |   | 51,417       |   |  |              |         |   |  |   | 137,687    |  
|Other                                                                    |  |                | 5,253   |           |              |   | 409,485       |              |  |   | 328,391      |   |  |              | (105,220 | ) |  |   | 637,909    |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Total expenses                                                           |  |                | 5,253   |           |              |   | 1,661,324     |              |  |   | 1,035,578    |   |  |              | (105,220 | ) |  |   | 2,596,935  |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Income (loss) before income tax expense and minority interest            |  |                | (1,326  | )         |              |   | 265,532       |              |  |   | 149,542      |   |  |              | 11,826   |   |  |   | 425,574    |  
|Income tax expense(benefit)                                              |  |                | (454    | )         |              |   | (574,759      | )            |  |   | 220,849      |   |  |              | 65,191   |   |  |   | (289,173   | )
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Income (loss) before minority interest                                   |  |                | (872    | )         |              |   | 840,291       |              |  |   | (71,307      | ) |  |              | (53,365  | ) |  |   | 714,747    |  
|Minority interest                                                        |  |                |        |           |              |   |              |              |  |   | 9,654        |   |  |              |         |   |  |   | 9,654      |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Income (loss) before equity in net earnings (losses) of
    subsidiaries |  |                | (872    | )         |              |   | 840,291       |              |  |   | (80,961      | ) |  |              | (53,365  | ) |  |   | 705,093    |  
|Equity in net earnings (losses) of subsidiaries                          |  |                | 705,965 |           |              |   | (134,326      | )            |  |   |             |   |  |              | (571,639 | ) |  |   |           |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net income (loss)                                                        |  | $              | 705,093 |           |              | $ | 705,965       |              |  | $ | (80,961      | ) |  | $            | (625,004 | ) |  | $ | 705,093    |  
|                                                                         |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         

160



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Year Ended December 31, 2005


|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|----------------------------------------------------------- |  | -------------- | --------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | --------- | -
|                                                            |  |                |           | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                            |  | Parent         |           |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|                                                            |  | (In thousands) |          
|Revenue                                                     |  |                |           |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|Interest income                                             |  | $              | 422,721   |           |              | $ | 1,133,814     |              |  | $ | 4,664,518    |   |  | $            | (423,956   | ) |  | $ | 5,797,097 |  
|Interest expense                                            |  |                | 406,437   |           |              |   | 746,299       |              |  |   | 3,164,078    |   |  |              | (444,712   | ) |  |   | 3,872,102 |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Net interest income                                         |  |                | 16,284    |           |              |   | 387,515       |              |  |   | 1,500,440    |   |  |              | 20,756     |   |  |   | 1,924,995 |  
|Provision for loan losses                                   |  |                |          |           |              |   | 149,577       |              |  |   | 512,403      |   |  |              | (10,184    | ) |  |   | 651,796   |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Net interest income after provision for loan losses         |  |                | 16,284    |           |              |   | 237,938       |              |  |   | 988,037      |   |  |              | 30,940     |   |  |   | 1,273,199 |  
|Gain on sale of mortgage loans, net                         |  |                |          |           |              |   | 727,633       |              |  |   | 339,986      |   |  |              | (30,950    | ) |  |   | 1,036,669 |  
|Servicing fees                                              |  |                |          |           |              |   | 1,420,086     |              |  |   | (1,296       | ) |  |              | (2,510     | ) |  |   | 1,416,280 |  
|Amortization and impairment of servicing rights             |  |                |          |           |              |   | (761,674      | )            |  |   | (314         | ) |  |              |           |   |  |   | (761,988  | )
|Servicing asset valuation and hedge gain, net               |  |                |          |           |              |   | 17,186        |              |  |   |             |   |  |              |           |   |  |   | 17,186    |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Net servicing fees                                          |  |                |          |           |              |   | 675,598       |              |  |   | (1,610       | ) |  |              | (2,510     | ) |  |   | 671,478   |  
|Gain (loss) on investment securities, net                   |  |                | (1,553    | )         |              |   | 134,859       |              |  |   | 102,493      |   |  |              | 563        |   |  |   | 236,362   |  
|Real estate related revenues                                |  |                |          |           |              |   | 132,345       |              |  |   | 575,616      |   |  |              |           |   |  |   | 707,961   |  
|Gain on sale of equity investments                          |  |                |          |           |              |   |              |              |  |   | 4,213        |   |  |              |           |   |  |   | 4,213     |  
|Other income                                                |  |                |          |           |              |   | 193,718       |              |  |   | 216,071      |   |  |              | (104,411   | ) |  |   | 305,378   |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Total net revenue                                           |  |                | 14,731    |           |              |   | 2,102,091     |              |  |   | 2,224,806    |   |  |              | (106,368   | ) |  |   | 4,235,260 |  
|                                                           
|Expenses                                                    |  |                |           |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|Compensation and benefits                                   |  |                |          |           |              |   | 866,030       |              |  |   | 540,900      |   |  |              |           |   |  |   | 1,406,930 |  
|Professional fees                                           |  |                | 15        |           |              |   | 165,688       |              |  |   | 46,707       |   |  |              |           |   |  |   | 212,410   |  
|Data processing and telecommunications                      |  |                |          |           |              |   | 139,208       |              |  |   | 60,641       |   |  |              |           |   |  |   | 199,849   |  
|Advertising                                                 |  |                |          |           |              |   | 131,766       |              |  |   | 26,922       |   |  |              |           |   |  |   | 158,688   |  
|Occupancy                                                   |  |                |          |           |              |   | 75,015        |              |  |   | 46,286       |   |  |              |           |   |  |   | 121,301   |  
|Other                                                       |  |                | 4,677     |           |              |   | 322,868       |              |  |   | 299,542      |   |  |              | (117,931   | ) |  |   | 509,156   |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Total expenses                                              |  |                | 4,692     |           |              |   | 1,700,575     |              |  |   | 1,020,998    |   |  |              | (117,931   | ) |  |   | 2,608,334 |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Income (loss) before income tax expense                     |  |                | 10,039    |           |              |   | 401,516       |              |  |   | 1,203,808    |   |  |              | 11,563     |   |  |   | 1,626,926 |  
|Income tax expense                                          |  |                | 3,840     |           |              |   | 169,775       |              |  |   | 422,283      |   |  |              | 10,402     |   |  |   | 606,300   |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Income (loss) before equity in net earnings of subsidiaries |  |                | 6,199     |           |              |   | 231,741       |              |  |   | 781,525      |   |  |              | 1,161      |   |  |   | 1,020,626 |  
|Equity in net earnings of subsidiaries                      |  |                | 1,014,427 |           |              |   | 782,686       |              |  |   |             |   |  |              | (1,797,113 | ) |  |   |          |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           
|Net income                                                  |  | $              | 1,020,626 |           |              | $ | 1,014,427     |              |  | $ | 781,525      |   |  | $            | (1,795,952 | ) |  | $ | 1,020,626 |  
|                                                            |  |                |           |           |              |   |               |              |  |   |              |   |  |              |           

161



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Year Ended December 31, 2004


|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |            |   |  |   |            |  
|----------------------------------------------------------- |  | -------------- | - | ------------ |  | - | ------------- | - |  | ------------ | --------- | - | ------------ | - | ---------- | - |  | - | ---------- | -
|                                                            |  |                |   | Guarantor    |  |   | Non-Guarantor |   |  |              |           |  
|                                                            |  | Parent         |   | Subsidiaries |  |   | Subsidiaries  |   |  | Eliminations |           |   | Consolidated |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |  
|                                                            |  | (In thousands) |  
|Revenue                                                     |  |                |   |              |  |   |               |   |  |              |           |   |              |   |            |   |  |   |            |  
|Interest income                                             |  | $              |  |              |  | $ | 759,816       |   |  | $            | 4,258,905 |   |              | $ | (27,840    | ) |  | $ | 4,990,881  |  
|Interest expense                                            |  |                |  |              |  |   | 354,805       |   |  |              | 2,087,786 |   |              |   | (37,609    | ) |  |   | 2,404,982  |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Net interest income                                         |  |                |  |              |  |   | 405,011       |   |  |              | 2,171,119 |   |              |   | 9,769      |   |  |   | 2,585,899  |  
|Provision for loan losses                                   |  |                |  |              |  |   | 264,536       |   |  |              | 578,363   |   |              |   |           |   |  |   | 842,899    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Net interest income after provision for loan losses         |  |                |  |              |  |   | 140,475       |   |  |              | 1,592,756 |   |              |   | 9,769      |   |  |   | 1,743,000  |  
|Gain on sale of mortgage loans, net                         |  |                |  |              |  |   | 437,963       |   |  |              | 264,220   |   |              |   | (5,280     | ) |  |   | 696,903    |  
|Servicing fees                                              |  |                |  |              |  |   | 1,303,354     |   |  |              | (6,843    | ) |              |   | (2,255     | ) |  |   | 1,294,256  |  
|Amortization and impairment of servicing rights             |  |                |  |              |  |   | (1,003,745    | ) |  |              | 480       |   |              |   |           |   |  |   | (1,003,265 | )
|Servicing asset valuation and hedge gain, net               |  |                |  |              |  |   | 214,911       |   |  |              |          |   |              |   |           |   |  |   | 214,911    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Net servicing fees                                          |  |                |  |              |  |   | 514,520       |   |  |              | (6,363    | ) |              |   | (2,255     | ) |  |   | 505,902    |  
|Gain (loss) on investment securities, net                   |  |                |  |              |  |   | 96,383        |   |  |              | (32,680   | ) |              |   |           |   |  |   | 63,703     |  
|Real estate related revenues                                |  |                |  |              |  |   | 107,810       |   |  |              | 514,070   |   |              |   |           |   |  |   | 621,880    |  
|Gain on sale of equity investments                          |  |                |  |              |  |   |              |   |  |              | 27,359    |   |              |   |           |   |  |   | 27,359     |  
|Other income                                                |  |                |  |              |  |   | 163,470       |   |  |              | 249,698   |   |              |   | (105,189   | ) |  |   | 307,979    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Total net revenue                                           |  |                |  |              |  |   | 1,460,621     |   |  |              | 2,609,060 |   |              |   | (102,955   | ) |  |   | 3,966,726  |  
|                                                           
|Expenses                                                    |  |                |   |              |  |   |               |   |  |              |           |   |              |   |            |   |  |   |            |  
|Compensation and benefits                                   |  |                |  |              |  |   | 708,259       |   |  |              | 508,278   |   |              |   |           |   |  |   | 1,216,537  |  
|Professional fees                                           |  |                |  |              |  |   | 175,549       |   |  |              | 49,167    |   |              |   |           |   |  |   | 224,716    |  
|Data processing and telecommunications                      |  |                |  |              |  |   | 144,689       |   |  |              | 46,387    |   |              |   |           |   |  |   | 191,076    |  
|Advertising                                                 |  |                |  |              |  |   | 125,288       |   |  |              | 26,057    |   |              |   |           |   |  |   | 151,345    |  
|Occupancy                                                   |  |                |  |              |  |   | 69,554        |   |  |              | 38,011    |   |              |   |           |   |  |   | 107,565    |  
|Other                                                       |  |                |  |              |  |   | 275,264       |   |  |              | 272,903   |   |              |   | (83,032    | ) |  |   | 465,135    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Total expenses                                              |  |                |  |              |  |   | 1,498,603     |   |  |              | 940,803   |   |              |   | (83,032    | ) |  |   | 2,356,374  |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Income (loss) before income tax expense                     |  |                |  |              |  |   | (37,982       | ) |  |              | 1,668,257 |   |              |   | (19,923    | ) |  |   | 1,610,352  |  
|Income tax expense                                          |  |                |  |              |  |   | 49,084        |   |  |              | 600,479   |   |              |   | (7,423     | ) |  |   | 642,140    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Income (loss) before equity in net earnings of subsidiaries |  |                |  |              |  |   | (87,066       | ) |  |              | 1,067,778 |   |              |   | (12,500    | ) |  |   | 968,212    |  
|Equity in net earnings of subsidiaries                      |  |                |  |              |  |   | 1,055,278     |   |  |              |          |   |              |   | (1,055,278 | ) |  |   |           |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           
|Net income                                                  |  | $              |  |              |  | $ | 968,212       |   |  | $            | 1,067,778 |   |              | $ | (1,067,778 | ) |  | $ | 968,212    |  
|                                                            |  |                |   |              |  |   |               |   |  |              |           |   |              |   |           

162



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


Year Ended December 31, 2006


|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|----------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | ----------- | -
|                                                                                                            |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                                            |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|                                                                                                            |  | (In thousands) |           
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                         |  | $              | 1,282,196  |           |              | $ | (13,581,729   | )            |  | $ | (5,517,145   | ) |  | $            | (2,286,994 | ) |  | $ | (20,103,672 | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                       |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net (increase) decrease in lending receivables                                                              |  |                |           |           |              |   | (1,348,836    | )            |  |   | 148,416      |   |  |              |           |   |  |   | (1,200,420  | )
|Originations and purchases of mortgage loans held for investment                                            |  |                | (59,438    | )         |              |   | (9,553,024    | )            |  |   | (7,109,349   | ) |  |              | 1,403,021  |   |  |   | (15,318,790 | )
|Proceeds from sales and repayments of mortgage loans held for
    investment                                |  |                |           |           |              |   | 3,276,931     |              |  |   | 23,320,568   |   |  |              | (1,410,856 | ) |  |   | 25,186,643  |  
|Purchases of available for sale securities                                                                  |  |                |           |           |              |   | (26           | )            |  |   | (54,247      | ) |  |              |           |   |  |   | (54,273     | )
|Proceeds from sales and repayments of available for sale
    securities                                     |  |                |           |           |              |   | 1,825         |              |  |   | 22,503       |   |  |              |           |   |  |   | 24,328      |  
|Additions to mortgage servicing rights                                                                      |  |                |           |           |              |   | (11,780       | )            |  |   |             |   |  |              |           |   |  |   | (11,780     | )
|Purchase of and advances to investments in real estate and other                                            |  |                |           |           |              |   | (45,757       | )            |  |   | (1,649,345   | ) |  |              |           |   |  |   | (1,695,102  | )
|Proceeds from sales of and returns of investments in real estate
    and other                              |  |                |           |           |              |   | 637,536       |              |  |   | 740,674      |   |  |              |           |   |  |   | 1,378,210   |  
|Consolidation of IB Finance Holding Company LLC                                                             |  |                |           |           |              |   |              |              |  |   | 251,347      |   |  |              |           |   |  |   | 251,347     |  
|Acquisitions, net of cash acquired                                                                          |  |                |           |           |              |   |              |              |  |   | (2,551       | ) |  |              |           |   |  |   | (2,551      | )
|Payment of capital contribution                                                                             |  |                | (100,000   | )         |              |   | (461,314      | )            |  |   |             |   |  |              | 561,314    |   |  |   |            |  
|Net increase in affiliate lending                                                                           |  |                | (3,998,484 | )         |              |   |              |              |  |   |             |   |  |              | 3,998,484  |   |  |   |            |  
|Purchase of non-voting interests and additional capital
    contributions in IB Finance Holding Company LLC |  |                | (1,463,500 | )         |              |   |              |              |  |   |             |   |  |              | 1,463,500  |   |  |   |            |  
|Other, net                                                                                                  |  |                |           |           |              |   | 224,398       |              |  |   | 756,799      |   |  |              | 262        |   |  |   | 981,459     |  
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) investing activities                                                         |  |                | (5,621,422 | )         |              |   | (7,280,047    | )            |  |   | 16,424,815   |   |  |              | 6,015,725  |   |  |   | 9,539,071   |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                       |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net increase (decrease) in affiliate borrowings                                                             |  |                | (4,130,000 | )         |              |   | 2,259,372     |              |  |   | 691,650      |   |  |              | (3,998,484 | ) |  |   | (5,177,462  | )
|Net increase in other short-term borrowings                                                                 |  |                | 75,000     |           |              |   | 720,965       |              |  |   | 1,932,223    |   |  |              | 2,615      |   |  |   | 2,730,803   |  
|Proceeds from issuance of collateralized borrowings in
    securitization trusts                            |  |                |           |           |              |   | 19,247,419    |              |  |   | 70,142       |   |  |              |           |   |  |   | 19,317,561  |  
|Repayments of collateralized borrowings in securitization trusts                                            |  |                |           |           |              |   |              |              |  |   | (22,605,088  | ) |  |              |           |   |  |   | (22,605,088 | )
|Proceeds from secured aggregation facilities, long-term                                                     |  |                |           |           |              |   |              |              |  |   | 29,071,067   |   |  |              |           |   |  |   | 29,071,067  |  
|Repayments of secured aggregation facilities, long-term                                                     |  |                |           |           |              |   |              |              |  |   | (27,942,989  | ) |  |              |           |   |  |   | (27,942,989 | )
|Proceeds from other long-term borrowings                                                                    |  |                | 8,204,465  |           |              |   |              |              |  |   | 6,093,582    |   |  |              |           |   |  |   | 14,298,047  |  
|Repayments of other long-term borrowings                                                                    |  |                |           |           |              |   |              |              |  |   | (568,430     | ) |  |              |           |   |  |   | (568,430    | )
|Payments of debt issuance costs                                                                             |  |                | (46,182    | )         |              |   |              |              |  |   | (63,498      | ) |  |              |           |   |  |   | (109,680    | )
|Proceeds from capital contribution                                                                          |  |                |           |           |              |   | 100,000       |              |  |   | 1,924,814    |   |  |              | (2,024,814 | ) |  |   |            |  
|Dividends paid                                                                                              |  |                | (580,752   | )         |              |   | (1,167,252    | )            |  |   | (1,124,700   | ) |  |              | 2,291,952  |   |  |   | (580,752    | )
|Increase in deposit liabilities                                                                             |  |                |           |           |              |   |              |              |  |   | 1,695,271    |   |  |              | 47,607     |   |  |   | 1,742,878   |  
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) financing activities                                                         |  |                | 3,522,531  |           |              |   | 21,160,504    |              |  |   | (10,825,956  | ) |  |              | (3,681,124 | ) |  |   | 10,175,955  |  
|Effect of foreign exchange rates on cash and
    cash equivalents                                           |  |                | 22,481     |           |              |   |              |              |  |   | 118,259      |   |  |              |           |   |  |   | 140,740     |  
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                        |  |                | (794,214   | )         |              |   | 298,728       |              |  |   | 199,973      |   |  |              | 47,607     |   |  |   | (247,906    | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                                              |  |                | 1,626,814  |           |              |   | 158,167       |              |  |   | 556,252      |   |  |              | (74,480    | ) |  |   | 2,266,753   |  
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                                                    |  | $              | 832,600    |           |              | $ | 456,895       |              |  | $ | 756,225      |   |  | $            | (26,873    | ) |  | $ | 2,018,847   |  
|                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           









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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


Year Ended December 31, 2005


|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | ----------- | -
|                                                                                 |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                 |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|                                                                                 |  | (In thousands) |           
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                              |  | $              | 20,529     |           |              | $ | (23,247,733   | )            |  | $ | (2,657,083   | ) |  | $            | (262,829   | ) |  | $ | (26,147,116 | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net (increase) decrease in lending receivables                                   |  |                |           |           |              |   | 414,063       |              |  |   | (4,388,826   | ) |  |              |           |   |  |   | (3,974,763  | )
|Originations and purchases of mortgage loans held for investment                 |  |                |           |           |              |   | (14,818,629   | )            |  |   | (5,347,369   | ) |  |              | 84,138     |   |  |   | (20,081,860 | )
|Proceeds from sales and repayments of mortgage loans held for
    investment     |  |                |           |           |              |   | 5,078,443     |              |  |   | 22,450,215   |   |  |              |           |   |  |   | 27,528,658  |  
|Purchases of available for sale securities                                       |  |                |           |           |              |   | (551,489      | )            |  |   | (47,124      | ) |  |              |           |   |  |   | (598,613    | )
|Proceeds from sales and repayments of available for sale
    securities          |  |                |           |           |              |   | 724,436       |              |  |   | 22,779       |   |  |              |           |   |  |   | 747,215     |  
|Additions to mortgage servicing rights                                           |  |                |           |           |              |   | (263,737      | )            |  |   | (2,852       | ) |  |              |           |   |  |   | (266,589    | )
|Sales of mortgage servicing rights                                               |  |                |           |           |              |   | 207,591       |              |  |   |             |   |  |              |           |   |  |   | 207,591     |  
|Purchase of and advances to investments in real estate and other                 |  |                |           |           |              |   | (47,300       | )            |  |   | (1,201,953   | ) |  |              |           |   |  |   | (1,249,253  | )
|Proceeds from sales of and returns of investments in real estate
    and other   |  |                |           |           |              |   | 120,757       |              |  |   | 803,167      |   |  |              |           |   |  |   | 923,924     |  
|Acquisitions, net of cash acquired                                               |  |                |           |           |              |   |              |              |  |   | (3,988       | ) |  |              |           |   |  |   | (3,988      | )
|Payment of capital contribution                                                  |  |                |           |           |              |   | (39,487       | )            |  |   |             |   |  |              | 39,487     |   |  |   |            |  
|Net (increase) decrease in affiliate lending                                     |  |                | (3,477,487 | )         |              |   |              |              |  |   |             |   |  |              | 3,477,487  |   |  |   |            |  
|Other, net                                                                       |  |                | (4,100     | )         |              |   | 156,373       |              |  |   | 572,426      |   |  |              |           |   |  |   | 724,699     |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) investing activities                              |  |                | (3,481,587 | )         |              |   | (9,018,979    | )            |  |   | 12,856,475   |   |  |              | 3,601,112  |   |  |   | 3,957,021   |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net increase (decrease) in affiliate borrowings                                  |  |                | (1,879,000 | )         |              |   | 3,310,972     |              |  |   | (841,433     | ) |  |              | (3,418,972 | ) |  |   | (2,828,433  | )
|Net increase in other short-term borrowings                                      |  |                |           |           |              |   | 2,052,041     |              |  |   | 2,193,509    |   |  |              | (2,615     | ) |  |   | 4,242,935   |  
|Proceeds from issuance of collateralized borrowings in
    securitization trusts |  |                |           |           |              |   | 26,413,355    |              |  |   | 1,937,191    |   |  |              | 11,451     |   |  |   | 28,361,997  |  
|Repayments of collateralized borrowings in securitization trusts                 |  |                |           |           |              |   |              |              |  |   | (22,682,856  | ) |  |              |           |   |  |   | (22,682,856 | )
|Proceeds from secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | 7,896,054    |   |  |              |           |   |  |   | 7,896,054   |  
|Repayments of secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | (3,157,448   | ) |  |              |           |   |  |   | (3,157,448  | )
|Proceeds from other long-term borrowings                                         |  |                | 7,003,053  |           |              |   |              |              |  |   | 2,622,226    |   |  |              |           |   |  |   | 9,625,279   |  
|Repayments of other long-term borrowings                                         |  |                |           |           |              |   |              |              |  |   | (210,000     | ) |  |              |           |   |  |   | (210,000    | )
|Payments of debt issuance costs                                                  |  |                | (36,181    | )         |              |   |              |              |  |   | (85,232      | ) |  |              |           |   |  |   | (121,413    | )
|Proceeds from capital contribution                                               |  |                |           |           |              |   |              |              |  |   | 39,487       |   |  |              | (39,487    | ) |  |   |            |  
|Dividends paid                                                                   |  |                |           |           |              |   |              |              |  |   | (80,000      | ) |  |              | 80,000     |   |  |   |            |  
|Increase in deposit liabilities                                                  |  |                |           |           |              |   |              |              |  |   | 2,458,334    |   |  |              |           |   |  |   | 2,458,334   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) financing activities                              |  |                | 5,087,872  |           |              |   | 31,776,368    |              |  |   | (9,910,168   | ) |  |              | (3,369,623 | ) |  |   | 23,584,449  |  
|Effect of foreign exchange rates on cash and
    cash equivalents                |  |                |           |           |              |   |              |              |  |   | (26,684      | ) |  |              |           |   |  |   | (26,684     | )
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                        |  |                | 1,626,814  |           |              |   | (490,344      | )            |  |   | 262,540      |   |  |              | (31,340    | ) |  |   | 1,367,670   |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                   |  |                |           |           |              |   | 648,511       |              |  |   | 293,712      |   |  |              | (43,140    | ) |  |   | 899,083     |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                         |  | $              | 1,626,814  |           |              | $ | 158,167       |              |  | $ | 556,252      |   |  | $            | (74,480    | ) |  | $ | 2,266,753   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           







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RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


RESIDENTIAL CAPITAL CORPORATION


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


Year Ended December 31, 2004


|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |          |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | -------------- | - | ------------ |  | - | ------------- | - |  | ------------ | ----------- | - | ------------ | - | -------- | - |  | - | ----------- | -
|                                                                                 |  |                |   | Guarantor    |  |   | Non-Guarantor |   |  |              |             |  
|                                                                                 |  | Parent         |   | Subsidiaries |  |   | Subsidiaries  |   |  | Eliminations |             |   | Consolidated |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |  
|                                                                                 |  | (In thousands) |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                        |  | $              |  |              |  | $ | 1,768,711     |   |  | $            | 139,384     |   |              | $ | (210,702 | ) |  | $ | 1,697,393   |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                            |  |                |   |              |  |   |               |   |  |              |             |   |              |   |          |   |  |   |             |  
|Net (increase) decrease in lending receivables                                   |  |                |  |              |  |   | 349,026       |   |  |              | (1,451,190  | ) |              |   |         |   |  |   | (1,102,164  | )
|Originations and purchases of mortgage loans held for investment                 |  |                |  |              |  |   | (37,137,192   | ) |  |              | (1,263,614  | ) |              |   |         |   |  |   | (38,400,806 | )
|Proceeds from sales and repayments of mortgage loans held for
    investment     |  |                |  |              |  |   | 9,150,037     |   |  |              | 15,945,165  |   |              |   |         |   |  |   | 25,095,202  |  
|Purchases of available for sale securities                                       |  |                |  |              |  |   | (1,103,427    | ) |  |              | (61,656     | ) |              |   |         |   |  |   | (1,165,083  | )
|Proceeds from sales and repayments of available for sale
    securities          |  |                |  |              |  |   | 6,006         |   |  |              | 18,769      |   |              |   |         |   |  |   | 24,775      |  
|Additions to mortgage servicing rights                                           |  |                |  |              |  |   | (240,659      | ) |  |              | (856        | ) |              |   |         |   |  |   | (241,515    | )
|Purchase of and advances to investments in real estate and other                 |  |                |  |              |  |   | (43,375       | ) |  |              | (840,465    | ) |              |   |         |   |  |   | (883,840    | )
|Proceeds from sales of and returns of investments in real estate
    and other   |  |                |  |              |  |   | 137,140       |   |  |              | 636,237     |   |              |   |         |   |  |   | 773,377     |  
|Acquisitions, net of cash acquired                                               |  |                |  |              |  |   | (11,764       | ) |  |              |            |   |              |   |         |   |  |   | (11,764     | )
|Payment of capital contribution                                                  |  |                |  |              |  |   | (37,196       | ) |  |              |            |   |              |   | 37,196   |   |  |   |            |  
|Other, net                                                                       |  |                |  |              |  |   | 221,183       |   |  |              | (12,087     | ) |              |   |         |   |  |   | 209,096     |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |         
|Net cash provided by (used in) investing activities                              |  |                |  |              |  |   | (28,710,221   | ) |  |              | 12,970,303  |   |              |   | 37,196   |   |  |   | (15,702,722 | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |  |                |   |              |  |   |               |   |  |              |             |   |              |   |          |   |  |   |             |  
|Net increase (decrease) in affiliate borrowings                                  |  |                |  |              |  |   | (1,346,345    | ) |  |              | 668,712     |   |              |   |         |   |  |   | (677,633    | )
|Net increase in other short-term borrowings                                      |  |                |  |              |  |   | 1,249,313     |   |  |              | 1,739,379   |   |              |   |         |   |  |   | 2,988,692   |  
|Proceeds from issuance of collateralized borrowings in
    securitization trusts |  |                |  |              |  |   | 27,020,623    |   |  |              | 1,780,618   |   |              |   | 3,570    |   |  |   | 28,804,811  |  
|Repayments of collateralized borrowings in securitization trusts                 |  |                |  |              |  |   |              |   |  |              | (17,498,926 | ) |              |   |         |   |  |   | (17,498,926 | )
|Proceeds from other long-term borrowings                                         |  |                |  |              |  |   |              |   |  |              | 269,000     |   |              |   |         |   |  |   | 269,000     |  
|Repayments of other long-term borrowings                                         |  |                |  |              |  |   |              |   |  |              | (220,000    | ) |              |   |         |   |  |   | (220,000    | )
|Payments of debt issuance costs                                                  |  |                |  |              |  |   |              |   |  |              | (102,618    | ) |              |   |         |   |  |   | (102,618    | )
|Proceeds from capital contribution                                               |  |                |  |              |  |   |              |   |  |              | 37,196      |   |              |   | (37,196  | ) |  |   |            |  
|Dividends paid                                                                   |  |                |  |              |  |   |              |   |  |              | (185,000    | ) |              |   | 185,000  |   |  |   |            |  
|Increase in deposit liabilities                                                  |  |                |  |              |  |   |              |   |  |              | 383,515     |   |              |   |         |   |  |   | 383,515     |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |         
|Net cash provided by (used in) financing activities                              |  |                |  |              |  |   | 26,923,591    |   |  |              | (13,128,124 | ) |              |   | 151,374  |   |  |   | 13,946,841  |  
|Effect of foreign exchange rates on cash and
    cash equivalents                |  |                |  |              |  |   |              |   |  |              | 16,478      |   |              |   |         |   |  |   | 16,478      |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |         
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                        |  |                |  |              |  |   | (17,919       | ) |  |              | (1,959      | ) |              |   | (22,132  | ) |  |   | (42,010     | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                   |  |                |  |              |  |   | 666,430       |   |  |              | 295,671     |   |              |   | (21,008  | ) |  |   | 941,093     |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |         
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                         |  | $              |  |              |  | $ | 648,511       |   |  | $            | 293,712     |   |              | $ | (43,140  | ) |  | $ | 899,083     |  
|                                                                                 |  |                |   |              |  |   |               |   |  |              |             |   |              |   |         





non-guarantor


165



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##### Table of Contents



RESIDENTIAL CAPITAL, LLC


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


29.     Quarterly Financial Data
(Unaudited)


|                             |                              |                    |   |           |          |  |   |               |  |  |              |           |  |  |   |          |  
|---------------------------- | ---------------------------- | ------------------ | - | --------- | -------- |  | - | ------------- |  |  | ------------ | --------- |  |  | - | -------- | -
|                             |                              | Three Months Ended |  
|                             |                              |                    |  
|                             |                              | March 31,          |   |           | June 30, |  |   | September 30, |  |  | December 31, |          
|                             |                              |                    |   |           |          |  |   |               |  |  |              |          
|                             |                              | (In thousands)     |  
|Year ended December 31, 2006 |                              |                    |   |           |          |  |   |               |  |  |              |           |  |  |   |         
|                             | Total net revenue            |                    | $ | 941,876   |          |  | $ | 1,573,832     |  |  | $            | 792,641   |  |  | $ | (285,840 | )
|                             | Operating expenses           |                    |   | 602,409   |          |  |   | 695,066       |  |  |              | 643,670   |  |  |   | 655,790  |  
|                             | Income tax expense (benefit) |                    |   | 137,973   |          |  |   | 330,618       |  |  |              | 65,538    |  |  |   | (823,302 | )
|                             | Minority interest            |                    |   |          |          |  |   |              |  |  |              |          |  |  |   | 9,654    |  
|                             |                              |                    |   |           |          |  |   |               |  |  |              |          
|                             | Net income (loss)            |                    | $ | 201,494   |          |  | $ | 548,148       |  |  | $            | 83,433    |  |  | $ | (127,982 | )
|                             |                              |                    |   |           |          |  |   |               |  |  |              |          
|Year ended December 31, 2005 |                              |                    |   |           |          |  |   |               |  |  |              |           |  |  |   |         
|                             | Total net revenue            |                    | $ | 1,127,577 |          |  | $ | 1,098,405     |  |  | $            | 1,173,622 |  |  | $ | 835,656  |  
|                             | Operating expenses           |                    |   | 598,727   |          |  |   | 639,358       |  |  |              | 702,320   |  |  |   | 667,929  |  
|                             | Income tax expense           |                    |   | 207,055   |          |  |   | 158,621       |  |  |              | 191,197   |  |  |   | 49,427   |  
|                             |                              |                    |   |           |          |  |   |               |  |  |              |          
|                             | Net income                   |                    | $ | 321,795   |          |  | $ | 300,426       |  |  | $            | 280,105   |  |  | $ | 118,300  |  
|                             |                              |                    |   |           |          |  |   |               |  |  |              |          

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RESIDENTIAL CAPITAL, LLC





SUPPLEMENTARY FINANCIAL DATA


SCHEDULE I  CONDENSED FINANCIAL
INFORMATION OF PARENT COMPANY




CONDENSED BALANCE SHEET


December 31, 2006 and 2005


(In thousands)


|                                           |                      |                  |            |            |            |   |            |           |            | 
|------------------------------------------ | -------------------- | ---------------- | ---------- | ---------- | ---------- | - | ---------- | --------- | ---------- | 
|                                           |                      | 2006             |            |            | 2005       |  
|                                           |                      |                  |            |            |            |  
|ASSETS                                     |                      |                  |            |            |            |   |            |          
|Cash and cash equivalents                  |                      | $                | 832,600    |            |            | $ | 1,626,814  |          
|Accounts receivable                        |                      |                  | 3,450      |            |            |   | 6,661      |          
|Other assets                               |                      |                  | 305,541    |            |            |   | 95,129     |          
|Investments in and loans to subsidiaries   |                      |                  | 22,107,251 |            |            |   | 16,885,741 |          
|                                           |                      |                  |            |            |            |  
|Total assets                               |                      | $                | 23,248,842 |            |            | $ | 18,614,345 |          
|                                           |                      |                  |            |            |            |  
|LIABILITIES                                |                      |                  |            |            |            |   |            |          
|Borrowings:                                |                      |                  |            |            |            |   |            |          
|                                           | Affiliate borrowings |                  | $          |           |            |   | $          | 4,130,000 |           
|                                           | Other borrowings     |                  |            | 15,233,823 |            |   |            | 6,900,519 |           
|                                           |                      |                  |            |            |            |  
|                                           |                      | Total borrowings |            |            | 15,233,823 |   |            |           | 11,030,519 | 
|Other liabilities                          |                      |                  | 392,906    |            |            |   | 119,856    |          
|                                           |                      |                  |            |            |            |  
|Total liabilities                          |                      |                  | 15,626,729 |            |            |   | 11,150,375 |          
|STOCKHOLDERS EQUITY                       |                      |                  |            |            |            |   |            |          
|Common stock and paid-in capital           |                      |                  |           |            |            |   | 3,367,677  |          
|Members interest                          |                      |                  | 3,837,943  |            |            |   |           |          
|Retained earnings                          |                      |                  | 3,651,935  |            |            |   | 3,980,587  |          
|Accumulated other comprehensive income     |                      |                  | 132,235    |            |            |   | 115,706    |          
|                                           |                      |                  |            |            |            |  
|Total stockholders equity                 |                      |                  | 7,622,113  |            |            |   | 7,463,970  |          
|                                           |                      |                  |            |            |            |  
|Total liabilities and stockholders equity |                      | $                | 23,248,842 |            |            | $ | 18,614,345 |          
|                                           |                      |                  |            |            |            |  

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RESIDENTIAL CAPITAL, LLC


SUPPLEMENTARY FINANCIAL DATA


SCHEDULE I  CONDENSED FINANCIAL
INFORMATION OF
PARENT COMPANY  (Continued)


CONDENSED STATEMENT OF INCOME


Years Ended December 31, 2006 and 2005


(In thousands)


|                                                            |  |      |         |   |      |   |           |  
|----------------------------------------------------------- |  | ---- | ------- | - | ---- | - | --------- | -
|                                                            |  | 2006 |         |   | 2005 |  
|                                                            |  |      |         |   |      |  
|Revenue                                                     |  |      |         |   |      |   |           |  
|Interest income                                             |  | $    | 919,261 |   |      | $ | 422,721   |  
|Interest expense                                            |  |      | 916,433 |   |      |   | 406,437   |  
|                                                            |  |      |         |   |      |  
|Net interest income                                         |  |      | 2,828   |   |      |   | 16,284    |  
|Loss on sale of mortgage loans, net                         |  |      | (1,283  | ) |      |   |          |  
|Gain (loss) on investment securities, net                   |  |      | 286     |   |      |   | (1,553    | )
|Other income                                                |  |      | 2,096   |   |      |   |          |  
|                                                            |  |      |         |   |      |  
|Total net revenue                                           |  |      | 3,927   |   |      |   | 14,731    |  
|Expenses                                                    |  |      |         |   |      |   |           |  
|Professional fees                                           |  |      |        |   |      |   | 15        |  
|Other                                                       |  |      | 5,253   |   |      |   | 4,677     |  
|                                                            |  |      |         |   |      |  
|Total expenses                                              |  |      | 5,253   |   |      |   | 4,692     |  
|                                                            |  |      |         |   |      |  
|Income (loss) before income tax expense                     |  |      | (1,326  | ) |      |   | 10,039    |  
|Income tax expense (benefit)                                |  |      | (454    | ) |      |   | 3,840     |  
|                                                            |  |      |         |   |      |  
|Income (loss) before equity in net earnings of subsidiaries |  |      | (872    | ) |      |   | 6,199     |  
|Equity in net earnings of subsidiaries                      |  |      | 705,965 |   |      |   | 1,014,427 |  
|                                                            |  |      |         |   |      |  
|Net income                                                  |  | $    | 705,093 |   |      | $ | 1,020,626 |  
|                                                            |  |      |         |   |      |  

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RESIDENTIAL CAPITAL, LLC


SUPPLEMENTARY FINANCIAL DATA


SCHEDULE I  CONDENSED FINANCIAL
INFORMATION OF
PARENT COMPANY  (Continued)


CONDENSED STATEMENT OF CASH FLOWS


Years Ended December 31, 2006 and 2005


(In thousands)


|                                                                                                            |  |      |            |   |      |   |            |  
|----------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                                                                            |  | 2006 |            |   | 2005 |  
|                                                                                                            |  |      |            |   |      |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                   |  | $    | 1,282,196  |   |      | $ | 20,529     |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                                       |  |      |            |   |      |   |            |  
|Originations and purchases of mortgage loans held for investment                                            |  |      | (59,438    | ) |      |   |           |  
|Net increase in affiliate lending                                                                           |  |      | (3,998,484 | ) |      |   | (3,477,487 | )
|Purchase of non-voting interests and additional capital
    contributions in IB Finance Holding Company LLC |  |      | (1,463,500 | ) |      |   |           |  
|Payment of capital contribution                                                                             |  |      | (100,000   | ) |      |   |           |  
|Other, net                                                                                                  |  |      |           |   |      |   | (4,100     | )
|                                                                                                            |  |      |            |   |      |  
|Net cash used in investing activities                                                                       |  |      | (5,621,422 | ) |      |   | (3,481,587 | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                                       |  |      |            |   |      |   |            |  
|Net decrease in affiliate borrowings                                                                        |  |      | (4,130,000 | ) |      |   | (1,879,000 | )
|Net increase in other short-term borrowings                                                                 |  |      | 75,000     |   |      |   |           |  
|Proceeds from other long-term borrowings                                                                    |  |      | 8,204,465  |   |      |   | 7,003,053  |  
|Payments of debt issuance costs                                                                             |  |      | (46,182    | ) |      |   | (36,181    | )
|Dividends paid                                                                                              |  |      | (580,752   | ) |      |   |           |  
|                                                                                                            |  |      |            |   |      |  
|Net cash provided by financing activities                                                                   |  |      | 3,522,531  |   |      |   | 5,087,872  |  
|Effect of foreign exchange rates on cash and cash equivalents                                               |  |      | 22,481     |   |      |   |           |  
|                                                                                                            |  |      |            |   |      |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                        |  |      | (794,214   | ) |      |   | 1,626,814  |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                                              |  |      | 1,626,814  |   |      |   |           |  
|                                                                                                            |  |      |            |   |      |  
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                                                    |  | $    | 832,600    |   |      | $ | 1,626,814  |  
|                                                                                                            |  |      |            |   |      |  

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RESIDENTIAL CAPITAL, LLC


SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS


|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |         |         |  |   |           |           | 
|---------------------------- | ---------------------------------------------- | -------------- | --------- | --------- | ---------- | - | --------- | ---------- | - | - | ------------- | ------ | ---------- | ------ | ------- | ------- |  | - | --------- | --------- | 
|Column A                     |                                                | Column B       |           |           | Column C   |   |           | Column D   |   |   | Column E      |       
|                             |                                                |                |           |           |            |   |           |            |   |   |               |       
|                             |                                                |                |           | Additions |            |   |           |            |  
|                             |                                                |                |           |           |            |   |           |            |  
|                             |                                                | Balance at     |           |           | Charged to |   |           | Charged to |   |   |               |        | Balance at |       
|                             |                                                | Beginning of   |           |           | Costs and  |   |           | Other      |   |   |               |        | End of     |       
|                             |                                                | Period         |           |           | Expenses   |   |           | Accounts   |   |   | Deductions(1) |        |            | Period |        
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|                             |                                                | (In thousands) |          
|Year ended December 31, 2006 |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |         |         |  |   |           |          
|                             | Allowance for loan losses                      |                | $         | 1,253,313 |            |   | $         | 1,334,084  |   |   | $             | 25,667 |            |        | $       | 682,305 |  |   | $         | 1,930,759 | 
|                             | Allowance for uncollectible servicing advances |                |           | 4,690     |            |   |           | 3,405      |   |   |               |       |            |        |         | 3,550   |  |   |           | 4,545     | 
|                             | Allowance for trade and other receivables      |                |           | 5,432     |            |   |           | 3,256      |   |   |               |       |            |        |         | 584     |  |   |           | 8,104     | 
|                             | Liability for assets sold with recourse        |                |           | 37,015    |            |   |           | 71,868     |   |   |               |       |            |        |         | 6,736   |  |   |           | 102,147   | 
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|                             |                                                | $              | 1,300,450 |           |            | $ | 1,412,613 |            |   | $ | 25,667        |        |            | $      | 693,175 |         |  | $ | 2,045,555 |          
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|Year ended December 31, 2005 |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |         |         |  |   |           |          
|                             | Allowance for loan losses                      |                | $         | 1,014,677 |            |   | $         | 651,796    |   |   | $             |       |            |        | $       | 413,160 |  |   | $         | 1,253,313 | 
|                             | Allowance for uncollectible servicing advances |                |           | 3,169     |            |   |           | 3,157      |   |   |               |       |            |        |         | 1,636   |  |   |           | 4,690     | 
|                             | Allowance for trade and other receivables      |                |           | 6,383     |            |   |           | 1,305      |   |   |               |       |            |        |         | 2,256   |  |   |           | 5,432     | 
|                             | Liability for assets sold with recourse        |                |           | 58,835    |            |   |           | (8,402     | ) |   |               |       |            |        |         | 13,418  |  |   |           | 37,015    | 
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|                             |                                                | $              | 1,083,064 |           |            | $ | 647,856   |            |   | $ |              |        |            | $      | 430,470 |         |  | $ | 1,300,450 |          
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|Year ended December 31, 2004 |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |         |         |  |   |           |          
|                             | Allowance for loan losses                      |                | $         | 617,950   |            |   | $         | 842,899    |   |   | $             |       |            |        | $       | 446,172 |  |   | $         | 1,014,677 | 
|                             | Allowance for uncollectible servicing advances |                |           | 5,179     |            |   |           | 1,944      |   |   |               |       |            |        |         | 3,954   |  |   |           | 3,169     | 
|                             | Allowance for trade and other receivables      |                |           | 11,843    |            |   |           | 1,453      |   |   |               |       |            |        |         | 6,913   |  |   |           | 6,383     | 
|                             | Liability for assets sold with recourse        |                |           | 71,339    |            |   |           | 3,786      |   |   |               |       |            |        |         | 16,290  |  |   |           | 58,835    | 
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        
|                             |                                                | $              | 706,311   |           |            | $ | 850,082   |            |   | $ |              |        |            | $      | 473,329 |         |  | $ | 1,083,064 |          
|                             |                                                |                |           |           |            |   |           |            |   |   |               |        |            |        |        






|    |                                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|(1) | Actual losses charged against the valuation allowance, net of
    recoveries and reclassification.

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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
    AND FINANCIAL DISCLOSURE.








|         |                         
|-------- | ------------------------
|Item 9A. | CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures








Changes in Internal Control Over Financial Reporting




10-K.







|         |                   
|-------- | ------------------
|Item 9B. | OTHER INFORMATION.






PART III







|         |                                          
|-------- | -----------------------------------------
|Item 10. | DIRECTORS AND OFFICERS OF THE REGISTRANT.








|         |                        
|-------- | -----------------------
|Item 11. | EXECUTIVE COMPENSATION.








|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT.








|         |                                                
|-------- | -----------------------------------------------
|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.








| |                                                         
| | --------------------------------------------------------
| | Item 14.     PRINCIPAL
    ACCOUNTANT FEES AND SERVICES.



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|                                |  |                |        |  |      |   |        | 
|------------------------------- |  | -------------- | ------ |  | ---- | - | ------ | 
|Year Ended December 31,         |  | 2006           |        |  | 2005 |  
|                                |  |                |        |  |      |  
|                                |  | (in thousands) |       
|Audit fees (a)                  |  | $              | 14,045 |  |      | $ | 11,011 | 
|Audit-related fees (b)          |  |                | 660    |  |      |   | 448    | 
|Tax fees (c)                    |  |                | 813    |  |      |   | 602    | 
|All other fees                  |  |                |       |  |      |   |       | 
|                                |  |                |        |  |      |  
|Total principal accountant fees |  | $              | 15,518 |  |      | $ | 12,061 | 
|                                |  |                |        |  |      |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Audit fees pertain to the audit of our annual
    Consolidated Financial Statements, including reviews of the
    interim financial statements contained in our Quarterly Reports
    on Form 10-Q,
    completion of statutory reports, comfort letters to underwriters
    in connection with debt issuances, attest services, consents to
    the incorporation of the PwC audit report in publicly filed
    documents and assistance with and review of documents filed with
    the SEC.                      
|   
|(b) | Audit-related fees pertain to assurance and related
    services that are traditionally performed by the principal
    accountant, including employee benefit plan audits, due
    diligence related to mergers and acquisitions, accounting
    consultations and audits in connection with proposed or
    consummated acquisitions, internal control reviews, attest
    services that are not required by statute or regulation and
    consultation concerning financial accounting and reporting
    standards
|   
|(c) | Tax fees pertain to services performed for tax
    compliance, tax planning and tax advice, including preparation
    of tax returns and claims for refund and tax payment-planning
    services. Tax planning and advice also includes assistance with
    tax audits and appeals, and tax advice related to specific
    transactions.                                                                                                                                                                            

pre-approved









PART IV







|         |                                         
|-------- | ----------------------------------------
|Item 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES.



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SIGNATURES


th




| |                         
| | ------------------------
| | RESIDENTIAL CAPITAL, LLC
| | (Registrant)            



| |     |                     
| | --- | --------------------
| | By: | /s/ Bruce J. Paradis

| |                        
| | -----------------------
| |                        
| | Bruce J. Paradis       
| | Chief Executive Officer

th


|                                             |  |                                         |  | 
|-------------------------------------------- |  | --------------------------------------- |  | 
|Signatures                                   |  | Title                                  
|                                             |  |                                        
|                                            
|/s/ Eric A. FeldsteinEric
    A. Feldstein   |  | Chairman                               
|                                            
|/s/ Bruce J. ParadisBruce
    J. Paradis     |  | Chief Executive Officer and Director   
|                                            
|/s/ James R. GiertzJames
    R. Giertz       |  | Chief Financial Officer and Director   
|                                            
|/s/ James N. YoungJames
    N. Young         |  | Chief Accounting Officer and Controller
|                                            
|/s/ Thomas JacobThomas
    Jacob             |  | Director                               
|                                            
|/s/ Sanjiv KhattriSanjiv
    Khattri         |  | Director                               
|                                            
|/s/ Thomas C. MelzerThomas
    C. Melzer     |  | Director                               
|                                            
|/s/ David C. WalkerDavid
    C. Walker       |  | Director                               
|                                            
|/s/ Linda K. ZukauckasLinda
    K. Zukauckas |  | Director                               

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EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                                                                                                                                                  
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|No      |    | Description
|        |    |            
|        | 2  | .1          |  | Purchase and Assumption Agreement between GMAC Bank and GMAC
    Automotive Bank, dated November 20, 2006. (Incorporated by
    reference to Exhibit 2.1 to the Registrants Current
    Report on Form 8-K, filed on November 27, 2006.)                                                                                                        
|        | 2  | .2          |  | Equity Purchase Agreement between GMAC LLC and Residential
    Capital, LLC, dated November 20, 2006. (Incorporated by
    reference to Exhibit 2.2 to the Registrants Current
    Report on Form 8-K, filed on November 27, 2006.)                                                                                                             
|        | 3  | .1          |  | Certificate of Formation of Residential Capital, LLC.
    (Incorporated by reference to Exhibit 3.1 to the
    Registrants Current Report on Form 8-K, filed on
    October 25, 2006.)                                                                                                                                                          
|        | 3  | .2          |  | Certificate of Conversion to Limited Liability Company of
    Residential Capital, LLC. (Incorporated by reference to
    Exhibit 3.2 to the Registrants Current Report on Form
    8-K, filed on October 25, 2006.)                                                                                                                            
|        | 3  | .3          |  | Limited Liability Company Agreement of Residential Capital, LLC.
    (Incorporated by reference to Exhibit 3.3 to the
    Registrants Current Report on Form 8-K, filed on
    October 25, 2006.)                                                                                                                                               
|        | 3  | .4          |  | Certificate of Formation of GMAC Residential Holding Company,
    LLC.                                                                                                                                                                                                                                                                           
|        | 3  | .5          |  | Limited Liability Company Agreement of GMAC Residential Holding
    Company, LLC.                                                                                                                                                                                                                                                                
|        | 3  | .6          |  | Certificate of Formation of GMAC-RFC Holding Company, LLC.                                                                                                                                                                                                                                                                                       
|        | 3  | .7          |  | Limited Liability Company Agreement of GMAC-RFC Holding Company,
    LLC.                                                                                                                                                                                                                                                                        
|        | 3  | .8          |  | Certificate of Formation of GMAC Mortgage, LLC.                                                                                                                                                                                                                                                                                                  
|        | 3  | .9          |  | Limited Liability Company Agreement of GMAC Mortgage, LLC.                                                                                                                                                                                                                                                                                       
|        | 3  | .10         |  | Certificate of Formation of Residential Funding Company, LLC.                                                                                                                                                                                                                                                                                    
|        | 3  | .11         |  | Limited Liability Company Agreement of Residential Funding
    Company, LLC.                                                                                                                                                                                                                                                                     
|        | 3  | .12         |  | Certificate of Formation of HomeComings Financial, LLC.                                                                                                                                                                                                                                                                                          
|        | 3  | .13         |  | Limited Liability Company Agreement of HomeComings Financial,
    LLC.                                                                                                                                                                                                                                                                           
|        | 4  | .1          |  | Indenture among Residential Capital Corporation, the guarantors
    party thereto and Deutsche Bank Trust Company Americas, dated
    June 24, 2005. (Incorporated by reference to
    Exhibit 10.3 to the Registrants Registration
    Statement on Form S-4 (File No. 333-126640), filed on
    September 20, 2005.)                          
|        | 4  | .2          |  | Supplemental Indenture among Residential Capital Corporation,
    the guarantors party thereto and Deutsche Bank Trust Company
    Americas, dated June 24, 2005. (Incorporated by reference
    to Exhibit 10.3 to the Registrants Registration
    Statement on Form S-4 (File No. 333-126640), filed on
    September 20, 2005.)             
|        | 4  | .3          |  | Second Supplemental Indenture among Residential Capital
    Corporation, the guarantors party thereto and Deutsche Bank
    Trust Company Americas, dated November 21, 2005.
    (Incorporated by reference to Exhibit 4.3 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2005, filed on March 28, 2006.)
|        | 10 | .1          |  | Amended and Restated Operating Agreement between GMAC LLC and
    Residential Capital, LLC, dated November 27, 2006.
    (Incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K filed on
    November 30, 2006.)                                                                                          
|        | 10 | .2          |  | Subordinated Note Agreement between Residential Capital
    Corporation and General Motors Acceptance Corporation, dated
    June 24, 2005. (Incorporated by reference to
    Exhibit 10.2 to the Registrants Registration
    Statement on Form S-4 (File No. 333-126640), filed on
    September 2, 2005.)                                    
|        | 10 | .3          |  | Tax Allocation Agreement between Residential Capital Corporation
    and General Motors Acceptance Corporation, dated June 24,
    2005. (Incorporated by reference to Exhibit 10.3 to the
    Registrants Registration Statement on Form S-4 (File
    No. 333-126640), filed on September 20, 2005.)                                          

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##### Table of Contents



|                                                                                                                                                                                                                                                                                                                                                      |    |             |  |                                                                                                                                                                                                                                                                                                                                                                               
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit                                                                                                                                                                                                                                                                                                                                               |    |            
|No                                                                                                                                                                                                                                                                                                                                                    |    | Description
|                                                                                                                                                                                                                                                                                                                                                      |    |            
|                                                                                                                                                                                                                                                                                                                                                      | 10 | .4          |  | Trademark License Agreement among Residential Capital
    Corporation, General Motors Corporation and General Motors
    Acceptance Corporation, dated June 24, 2005. (Incorporated
    by reference to Exhibit 10.4 to the Registrants
    Registration Statement on Form S-4 (File
    No. 333-126640), filed on September 2, 2005.)                                       
|                                                                                                                                                                                                                                                                                                                                                      | 10 | .5          |  | Termination Agreement terminating Trademark License Agreement
    between Residential Capital, LLC and GMAC LLC, dated
    November 30, 2006. (Incorporated by reference to
    Exhibit 10.3 to the Registrants Current Report on
    Form 8-K, filed on November 30, 2006.)                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                      | 10 | .6          |  | Intellectual Property Sublicense Agreement between Residential
    Capital, LLC and GMAC LLC, dated November 30, 2006.
    (Incorporated by reference to Exhibit 10.4 to the
    Registrants Current Report on Form 8-K, filed on
    November 30, 2006.)                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                      | 10 | .7          |  | Amended and Restated Services and Facilities Agreement between
    Residential Capital, LLC and GMAC LLC, dated November 30,
    2006. (Incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K, filed on
    November 30, 2006.)                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                      | 10 | .8          |  | Revolving Credit Facility among Residential Capital Corporation,
    the several lenders from time to time parties thereto and
    General Motors Acceptance Corporation, as Agent, dated
    June 24, 2005. (Incorporated by reference to
    Exhibit 10.6 to the Registrants Registration
    Statement on Form S-4 (File No. 333-126640), filed on
    September 2, 2005.)
|                                                                                                                                                                                                                                                                                                                                                      | 12 | .1          |  | Computation of Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                      | 23 | .1          |  | Consent of Independent Registered Public Accounting Firm.                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                      | 31 | .1          |  | Certification of Principal Executive Officer pursuant to
    Rule 13a-14(a)/ 15d-14(a).                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                      | 31 | .2          |  | Certification of Principal Financial Officer pursuant to
    Rule 13a-14(a)/ 15d-14(a).                                                                                                                                                                                                                                                                                       
|The following exhibit shall not be deemed filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934 or otherwise subject to the liability of that Section. In
    addition Exhibit No. 32.1 shall not be deemed incorporated
    into any filing under the Securities Act of 1933 or the
    Securities Exchange Act of 1934.
|                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                      | 32 | .1          |  | Certification of Principal Executive Officer and Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                                                                                          

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