UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549-1004
  FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2008, oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For 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.)    One
    Meridian Crossings
    Minneapolis, MN
    55423 (Address
    of principal executive offices)
    (Zip Code)
   (952) 857-8700
 (Registrants telephone
    number, including area code)
   þ o
   Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ
    (Do not check if a smaller reporting company)

Smaller reporting
    company o    Rule 12b-2 o þ
      Reduced
    Disclosure Format
  Form 10-Q




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##### 





RESIDENTIAL
    CAPITAL, LLC
  INDEX
  PagePART I  FINANCIAL INFORMATIONItem 1.

Financial Statements (unaudited)


3Condensed Consolidated Balance Sheets as of June 30, 2008
    and December 31, 2007


3Condensed Consolidated Statements of Income for the Three and
    Six Months Ended June 30, 2008 and 2007


4Condensed Consolidated Statements of Changes in Equity for the
    Six Months Ended June 30, 2008 and 2007


5Condensed Consolidated Statements of Cash Flows for the Six
    Months Ended June 30, 2008 and 2007


6Notes to Condensed Consolidated Financial Statements


8Item 2.

Managements Discussion and Analysis of Financial Condition
    and Results of Operations


52Item 3.

Quantitative and Qualitative Disclosures About Market Risk


86Item 4.

Controls and Procedures


89PART II  OTHER INFORMATIONItem 1.

Legal Proceedings


90Item 1A.

Risk Factors


92Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


106Item 3.

Defaults Upon Senior Securities


106Item 4.

Submission of Matters to a Vote of Security Holders


106Item 5.

Other Information


106Item 6.

Exhibits


106Signatures


107Index of Exhibits


108  2




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##### 



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements. RESIDENTIAL
    CAPITAL, LLC



CONDENSED
    CONSOLIDATED BALANCE SHEETS

(Dollars
    in thousands)  June 30,


December 31,2008


2007(unaudited)ASSETSCash and cash equivalents

$
6,577,853


$
4,415,913Mortgage loans held for sale


7,035,841



11,998,236Trading securities


982,668



2,090,690Mortgage loans held for investment, net ($2,658,293 at fair
    value at June 30, 2008)


30,324,389



41,330,322Lending receivables, net


8,069,488



8,406,495Mortgage servicing rights


5,417,361



4,702,862Accounts receivable, net


2,765,428



3,187,913Investments in real estate and other


990,671



1,629,717Other assets


10,440,134



11,657,769Total assets

$
72,603,833


$
89,419,917LIABILITIESBorrowings:Borrowings from parent

$
4,700,000


$
Borrowings from affiliates


971,677



Collateralized borrowings in securitization trusts ($3,001,861
    at fair value at June 30, 2008)


7,900,050



16,145,741Other borrowings


31,148,980



46,184,150Total borrowings


44,720,707



62,329,891Deposit liabilities


17,536,939



13,349,844Other liabilities


4,803,306



6,370,305Total liabilities


67,060,952



82,050,040Minority interest


1,475,410



1,339,760EQUITYMembers interest


6,788,348



6,624,344Preferred membership interests


806,344



Accumulated deficit


(3,568,651
)


(694,756
)Accumulated other comprehensive income


41,430



100,529Total equity


4,067,471



6,030,117Total liabilities, minority interest and equity

$
72,603,833


$
89,419,917    3




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##### 



RESIDENTIAL
    CAPITAL, LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME  Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(Unaudited)(Dollars in thousands)RevenueInterest income

$
1,145,683


$
1,968,730


$
2,361,707


$
4,103,442Automotive operating lease income


148,522



123,385



295,796



234,615Total financing revenue


1,294,205



2,092,115



2,657,503



4,338,057Interest expense


977,027



1,656,377



2,147,423



3,401,561Depreciation expense on automotive operating lease income


85,374



71,881



172,661



137,757Impairment of investment in automotive operating leases


92,035







92,035



Net financing revenue


139,769



363,857



245,384



798,739Other revenue(Loss) gain on mortgage loans, net


(1,061,505
)


173,514



(1,809,501
)


(61,123
)Servicing fees


392,055



452,144



784,127



899,321Servicing asset valuation and hedge activities, net


(184,850
)


(151,533
)


224,653



(453,887
)Net servicing fees


207,205



300,611



1,008,780



445,434Loss on investment securities, net


(90,064
)


(56,474
)


(533,884
)


(16,540
)Real estate related revenues, net


18,656



137,606



(9,288
)


268,888Gain on extinguishment of debt


647,075







1,126,619



Loss on foreclosed real estate


(74,950
)


(69,738
)


(160,319
)


(92,178
)Other (loss) income


(340,489
)


55,272



(360,774
)


112,246Total other revenue


(694,072
)


540,791



(738,367
)


656,727Total net revenue


(554,303
)


904,648



(492,983
)


1,455,466Provision for loan losses


467,300



330,418



769,321



875,427Non-interest expenseCompensation and benefits


250,136



350,880



511,592



684,791Professional fees


164,735



57,516



225,568



115,502Data processing and telecommunications


40,682



45,492



81,178



93,366Advertising


18,810



35,097



36,998



65,517Occupancy


29,017



39,224



57,210



73,975Restructuring


17,681







37,895



Other


233,635



210,628



412,545



532,241Total non-interest expense


754,696



738,837



1,362,986



1,565,392Loss before income tax expense and minority interest


(1,776,299
)


(164,607
)


(2,625,290
)


(985,353
)Income tax expense


111,339



64,988



83,157



135,629Loss before minority interest


(1,887,638
)


(229,595
)


(2,708,447
)


(1,120,982
)Minority interest


(28,119
)


24,401



10,162



43,490Net loss

$
(1,859,519
)

$
(253,996
)

$
(2,718,609
)

$
(1,164,472
)    4




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##### 



RESIDENTIAL
    CAPITAL, LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six
    Months Ended June 30, 2008 and 2007  (Accumulated





AccumulatedPreferred


Deficit)





OtherMembers


Membership


Retained


Comprehensive


Comprehensive


TotalInterest


Interests


Earnings


Income (Loss)


Income


Equity(Unaudited)(Dollars in thousands)Balance at January 1, 2008

$
6,624,344


$



$
(694,756
)





$
100,529


$
6,030,117Cumulative effect of change in accounting principles as of
    January 1, 2008, net of tax:Adoption of Financial Accounting Standards Board No. 157










23,218











23,218Adoption of Financial Accounting Standards Board No. 159










(178,504
)










(178,504
)Net loss










(2,718,609
)

$
(2,718,609
)






(2,718,609
)Capital contributions


164,004



806,344















970,348Other comprehensive income, net of tax:Unrealized loss on available for sale securities














(1,228
)






(1,228
)Foreign currency translation adjustment














(41,083
)






(41,083
)Unrealized loss on cash flow hedges














(3,748
)






(3,748
)Pension adjustment SFAS No. 158














(13,040
)






(13,040
)Other comprehensive loss














(59,099
)


(59,099
)


Comprehensive loss













$
(2,777,708
)






Balance at June 30, 2008

$
6,788,348


$
806,344


$
(3,568,651
)





$
41,430


$
4,067,471Balance at January 1, 2007

$
3,837,943






$
3,651,935






$
132,235


$
7,622,113Cumulative effect of change in accounting principle as of
    January 1, 2007, net of tax:Adoption of Financial Accounting Standards Board Interpretation
    No. 48










(353
)










(353
)Net loss










(1,164,472
)

$
(1,164,472
)






(1,164,472
)Capital contribution


1,000,000



















1,000,000Other comprehensive income, net of tax:Unrealized gain on available for sale securities














269







269Foreign currency translation adjustment














18,681







18,681Unrealized gain on cash flow hedges














31,167







31,167Other comprehensive income














50,117



50,117



Comprehensive loss













$
(1,114,355
)






Balance at June 30, 2007

$
4,837,943


$



$
2,487,110






$
182,352


$
7,507,405    5




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##### 



RESIDENTIAL
    CAPITAL, LLC



CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS  Six Months Ended June 30,2008


2007(Unaudited)(Dollars in thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(2,718,609
)

$
(1,164,472
)Reconciliation of net loss to net cash provided by operating
    activities:Depreciation and amortization


317,045



199,932Provision for loan losses


769,321



875,427Loss on mortgage loans, net


1,809,501



61,123Loss on other assets, net


532,297



75,732Minority interest


10,162



43,490Gain on extinguishment of debt


(1,126,619
)


Loss on investment securities, net


533,884



16,540Equity in earnings of investees in excess of cash received


(4,640
)


(23,180
)Gain on mortgage servicing rights, net


(57,789
)


(183,476
)Originations and purchases of mortgage loans held for sale


(36,933,661
)


(69,471,441
)Proceeds from sales and repayments of mortgage loans held for
    sale


41,731,214



74,826,714Deferred income tax


189,502



(11,659
)Net change in:Trading securities


670,035



(1,314,475
)Accounts receivable


437,207



(6,212
)Other assets


1,582,221



696,686Other liabilities


(1,908,533
)


(553,707
)Net cash provided by operating activities


5,832,538



4,067,022CASH FLOWS FROM INVESTING ACTIVITIES:Net (increase) decrease in lending receivables


(3,471
)


3,659,282Originations and purchases of mortgage loans held for investment


(2,973,372
)


(4,002,380
)Proceeds from sales and repayments of mortgage loans held for
    investment


3,518,717



10,486,282Sales of mortgage servicing rights


174,112



Purchases of and advances to investments in real estate and other


(15,702
)


(175,182
)Proceeds from sales of and returns of investments in real estate
    and other


256,875



419,093Other, net


548,255



481,640Net cash provided by investing activities


1,505,414



10,868,735    6




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##### 



RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH
    FLOWS  (Continued)
  Six Months Ended June 30,2008


2007(Unaudited)(Dollars in thousands)CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in borrowings from parent

$
4,700,000


$
Net increase in borrowings from affiliates


971,677



Net decrease in other short-term borrowings


(9,055,895
)


(6,986,139
)Proceeds from issuance of collateralized borrowings in
    securitization trusts






1,223,104Repayments of collateralized borrowings in securitization trusts


(1,750,886
)


(9,416,405
)Proceeds from secured aggregation facilities, long-term


160,000



7,320,797Repayments of secured aggregation facilities, long-term


(465,114
)


(11,879,874
)Proceeds from other long-term borrowings


2,405,000



6,561,730Repayments of other long-term borrowings


(4,145,647
)


(1,788,281
)Extinguishment of long-term borrowings


(2,060,829
)


Payments of debt issuance costs


(37,342
)


(26,956
)Proceeds from capital contributions


14,264



1,000,000Increase in deposit liabilities


4,188,419



801,577Net cash used in financing activities


(5,076,353
)


(13,190,447
)Effect of foreign exchange rates on cash and cash equivalents


(99,659
)


(49,511
)NET INCREASE IN CASH AND CASH EQUIVALENTS


2,161,940



1,695,799CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


4,415,913



2,018,847CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
6,577,853


$
3,714,646SUPPLEMENTAL DISCLOSURES FOR NON-CASH TRANSACTIONS:Mortgage loans held for sale transferred to mortgage loans held
    for investment

$
581,801


$
1,582,079Mortgage loans held for investment transferred to mortgage loans
    held for sale


3,757,627



374,668Mortgage loans held for investment transferred to other assets


748,212



1,371,325Originations of mortgage servicing rights from sold loans


800,706



928,377Contributions of lending receivables


112,218



157,223Capital contributions through forgiveness of unsecured
    borrowings in exchange for preferred membership interests


806,344



Capital contributions through forgiveness of unsecured borrowings


164,004



Decrease in mortgage loans held for investment upon initial
    adoption of SFAS No. 159


3,846,775



Decrease in collateralized borrowings upon initial adoption of
    SFAS No. 159


3,667,522



OTHER DISCLOSURES:Proceeds from sales and repayments of mortgage loans held for
    investment originally designated as held for sale


1,095,184



3,414,825Proceeds from capital contribution to minority interest entities


14,264



    7




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  1.
    Basis of
    Presentation    No. 39-1, Amendment of FASB Interpretation No. 39 (FIN No. 39-1),
  Disclosures about Segments of an Enterprise and
    Related Information
  Form 10-K
  The Fair Value Option for Financial
    Assets and Financial Liabilities.
  Form 10-Q,
   8




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    and/or
  Recently
    Issued Accounting Standards
  Statement of Financial Accounting Standards
    No. 141(R) Business Combinations Business Combinations. case-by-case
  Statement of Financial Accounting Standards
    No. 160 Noncontrolling Interests in
    Consolidated Financial Statements  an amendment of
    ARB No. 51
  FASB Staff Position (FSP)
    FAS No. 140-3 FAS No. 140-3, Accounting for Transfers of Financial Assets and Repurchase
    Financing Transactions, FAS No. 140-3
 9




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Statement of Financial Accounting Standards
    No. 161  Disclosures about Derivative
    Instruments and Hedging Activities
  Statement of Financial Accounting Standards
    No. 162 The Hierarchy of Generally Accepted
    Accounting Principles The Meaning of Present Fairly in Conformity With
    Generally Accepted Accounting Principles The Meaning of Present
    Fairly in Conformity With Generally Accepted Accounting
    Principles
  FASB Staff Position (FSP) FAS
    No. 142-3  FAS No. 142-3, Determination of the Useful Life of Intangible Assets FAS No. 142-3 Goodwill and Other
    Intangible Assets FAS No. 142-3 FAS No. 142-3 FAS No. 142-3
  2.
    Recently
    Adopted Accounting Standards  Statement of Financial Accounting Standards
    No. 157 Fair Value
    Measurements No. 02-3, Issues Involved in Accounting for Derivative Contracts Held
    for Trading Purposes and Contracts Involved in Energy Trading
    and Risk Management Activities (EITF 02-3) EITF 02-3
  Statement of Financial Accounting Standards
    No. 159 The Fair Value Option
    for Financial Assets and Financial Liabilities
 10




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    SEC Staff Accounting
    Bulletin No. 109 Written Loan Commitments Recorded at Fair Value Through
    Earnings Application of Accounting Principles to Loan Commitments
  FASB Staff Position (FSP)
    FIN No. 39-1 FIN No. 39-1, Amendment of FASB Interpretation No. 39 FIN No. 39-1 FSP FIN No. 39-1,
  3.
    Mortgage
    Loans Held for Sale    June 30,


December 31,2008


2007(In thousands)Prime conforming

$
1,176,397


$
3,072,593Prime non-conforming


3,731,726



5,537,946Prime second-lien


262,981



729,323Government


1,321,804



816,285Nonprime


1,612,077



2,090,433Total unpaid principal balance


8,104,985



12,246,580Lower of cost or fair value adjustment and net (discounts)
    premiums


(1,069,144
)


(248,344
)Total net

$
7,035,841


$
11,998,236  11




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    June 30,


December 31,2008


2007(In thousands)Prime conforming

$
1,170,819


$
3,054,747Prime non-conforming


3,160,006



5,376,538Prime second-lien


262,274



723,369Government


1,326,268



817,504Nonprime


1,116,474



2,026,078Total net

$
7,035,841


$
11,998,236         4.
    Trading
    Securities    June 30,


December 31,2008


2007(In thousands)Mortgage and asset-backed securities(a)

$
459,397


$
905,292U.S. Treasury securities






257,320Principal-only securities


16,030



46,390Residual interests


386,015



684,701Interest-only securities


118,770



181,138Other


2,456



15,849Total

$
982,668


$
2,090,690Net unrealized losses

$
(912,704
)

$
(635,140
)Pledged as collateral

$
563,718


$
751,575     (a)
    
    See Note 16  Fair
    Value  includes $215.6 million of
    securities held by collateralized debt obligations for which the
    related debt is recorded at fair value under
    SFAS No. 159 as of June 30, 2008.   12




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  off-balance
  5.
    Mortgage
    Loans Held for Investment    June 30,


December 31,2008(a)


2007(In thousands)Prime conforming

$
863,937


$
1,099,221Prime non-conforming


17,535,417



18,057,688Prime second-lien


6,097,024



5,928,662Government


152,745



215,507Nonprime


13,837,032



17,747,020Total unpaid principal balance


38,486,155



43,048,098Net discounts


(499,424
)


(885,502
)SFAS No. 159 fair value adjustment


(7,024,462
)


Allowance for loan losses


(637,880
)


(832,274
)Total, net

$
30,324,389


$
41,330,322     June 30,


December 31,2008(a)


2007(In thousands)Prime conforming

$
831,238


$
1,064,777Prime non-conforming


17,032,078



17,943,448Prime second-lien


4,847,708



5,824,123Government


129,396



182,634Nonprime


7,483,969



16,315,340Total, net

$
30,324,389


$
41,330,322     (a)
    
    See Note 16  Fair Value 
    $9.7 billion of total unpaid principal balance is recorded
    at a fair value of $2.7 billion under
    SFAS No. 159 as of June 30, 2008.     13




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    6.
    Lending
    Receivables    June 30,


December 31,2008


2007(In thousands)Construction:Residential

$
2,486,647


$
2,844,647Residential mezzanine


272,917



357,512Resort


342,971



277,052Total construction


3,102,535



3,479,211Warehouse


1,447,260



1,669,583Commercial business


2,670,561



2,614,692Commercial real estate


1,259,435



1,031,937Other


74,810



96,298Total


8,554,601



8,891,721Less allowance for loan losses


(485,113
)


(485,226
)Total, net

$
8,069,488


$
8,406,495     Accounting for the
    Impairment or Disposal of Long-Lived Assets
   14




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  7.
    Allowance
    for Loan Losses    Mortgage LoansHeld forInvestment


Lending Receivables


Other


Total(In thousands)Balance at January 1, 2008

$
832,274


$
485,226


$
33,296


$
1,350,796Reduction to allowance due to fair value option election(a)


(488,982
)










(488,982
)Provision for loan losses


624,435



138,259



6,627



769,321Charge-offs


(350,779
)


(140,080
)


(9,184
)


(500,043
)Recoveries


20,932



1,708



4,784



27,424Balance at June 30, 2008

$
637,880


$
485,113


$
35,523


$
1,158,516Balance at January 1, 2007

$
1,508,361


$
396,641


$
25,757


$
1,930,759Provision for loan losses


648,753



220,125



6,549



875,427Charge-offs


(491,084
)


(343,055
)


(5,339
)


(839,478
)Recoveries


29,614



401



2,195



32,210Balance at June 30, 2007

$
1,695,644


$
274,112


$
29,162


$
1,998,918    15




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##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  8.
    Mortgage
    Servicing Rights    Mortgage ServicingRights Managed ByGMAC-RFC


InternationalGMAC Residential


Holding


BusinessHolding


(domestic only)


Group


Eliminations


Total(In thousands)Estimated fair value at January 1, 2008

$
3,514,671


$
1,170,665


$
17,526


$



$
4,702,862Additions obtained from sales of mortgage loans


796,057



4,302



347







800,706Subtractions from sales of servicing assets


(4,138
)


(169,974
)










(174,112
)Changes in fair value:Due to changes in valuation inputs or assumptions used in the
    valuation model


544,264



(13,993
)


(5,966
)






524,305Recognized day one gains on previously purchased MSRs upon
    adoption of SFAS No. 157


10,552















10,552Other changes in fair value


(390,509
)


(75,790
)










(466,299
)Other changes that affect the balance






18,256



1,091







19,347Estimated fair value at June 30, 2008

$
4,470,897


$
933,466


$
12,998


$



$
5,417,361Estimated fair value at January 1, 2007

$
3,752,733


$
1,164,585


$
12,743


$



$
4,930,061Additions obtained from sales of mortgage loans


658,345



266,823



3,209







928,377Additions from purchases of servicing assets


9,291











(9,291
)


Changes in fair value:Due to changes in valuation inputs or assumptions used in the
    valuation model


341,789



164,435











506,224Other changes in fair value


(155,538
)


(165,994
)


(1,216
)






(322,748
)Other changes that affect the balance






(10,724
)


293



9,291



(1,140
)Estimated fair value at June 30, 2007

$
4,606,620


$
1,419,125


$
15,029


$



$
6,040,774    16




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  clean-up
    GMAC-RFC


InternationalGMAC Residential


Holding


BusinessJune 30, 2008

Holding


(domestic only)


GroupWeighted average prepayment speed


15.8
%


22.1
%


8.6
%Range of prepayment speeds


6.2-47.6
%


15.6-39.6
%


0.7-27.8
%Weighted average discount rate


8.0
%


12.3
%


24.0
%Range of discount rates


5.3-28.6
%


9.0-31.8
%


8.0-30.5
%   GMAC-RFC


InternationalGMAC Residential


Holding


BusinessJune 30, 2007

Holding


(domestic only)


GroupWeighted average prepayment speed


14.8
%


22.9
%


8.3
%Range of prepayment speeds


13.5-39.7
%


20.9-23.9
%


0.0-23.6
%Weighted average discount rate


8.5
%


10.5
%


8.0
%Range of discount rates


8.3-13.0
%


10.4-10.5
%


8.0-8.0
%     GMAC-RFC

InternationalGMAC Residential

Holding

BusinessSix Months Ended June 30, 2008

Holding

(domestic only)

GroupRange of prepayment speeds (constant prepayment rate)


8.6-48.5
%


20.5-42.8
%


1.2-15.7
%Range of discount rates


4.4-23.6
%


13.5-16.6
%


12.5-24.0
%   GMAC-RFC

InternationalGMAC Residential

Holding

BusinessSix Months Ended June 30, 2007

Holding

(domestic only)

GroupRange of prepayment speeds (constant prepayment rate)


12.6-37.2
%


10.3-35.0
%


0.8-15.4
%Range of discount rates


7.7-13.9
%


10.2-17.7
%


8.0-8.0
%   and/or
 17




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007(In thousands)Contractual servicing fees (net of guarantee fees and including
    subservicing)

$
322,090


$
383,701


$
651,550


$
763,849Late fees


32,329



36,694



67,076



74,522Ancillary fees


37,636



31,749



65,501



60,950Total

$
392,055


$
452,144


$
784,127


$
899,321     9.
    Investments
    In Real Estate and Other    June 30,


December 31,2008


2007(In thousands)Residential real estate:Acquired through sale and leaseback agreements

$
365,798


$
636,228Construction in progress


85,558



114,064Real estate held for development


104,389



376,116555,745



1,126,408Accumulated depreciation


(8,349
)


(16,008
)Total residential real estate


547,396



1,110,400Other investments:Investments in partnerships


277



4,724Investments in real estate projects


396,324



418,554Other equity investments


46,674



96,039Total

$
990,671


$
1,629,717    18




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  10.
    Other
    Assets    June 30,


December 31,2008


2007(In thousands)Property and equipment at cost

$
716,433


$
761,038Accumulated depreciation and amortization


(528,746
)


(539,586
)Net property and equipment


187,687



221,452Automotive loans and lease financing, net


3,252,118



3,103,028Investments in automotive operating leases, net


2,384,686



2,522,027Available for sale securities


260,630



275,671Repossessed, foreclosed and owned real estate


1,166,576



1,165,293Derivative assets


1,199,989



1,733,486Other assets


1,988,448



2,636,812Total other assets

$
10,440,134


$
11,657,769     11.
    Borrowings    June 30,


December 31,2008


2007(In thousands)Borrowings from parent

$
4,700,000


$
Borrowings from affiliates


971,677



Collateralized borrowings in securitization trusts(a)(c)


7,900,050



16,145,741Other borrowings:Secured aggregation facilities  short-term


4,334,304



7,588,253Secured aggregation facilities  long-term(a)






813,938Senior secured notes  long-term(a)(b)


1,801,377



Junior secured notes  long-term(a)


5,112,874



Repurchase agreements  short-term


1,411,614



3,954,909Repurchase agreements  long-term(a)






18,569Senior unsecured notes  long-term(a)(b)


4,113,313



14,550,385Subordinated unsecured notes  long-term(a)


205,448



758,321FHLB advances  short-term






1,050,000FHLB advances  long-term(a)


10,693,000



10,299,000Third-party bank credit facilities  short-term






50,000Third-party bank credit facilities  long-term(a)






1,750,000Debt collateralized by mortgage loans  short-term


66,898



1,782,039Servicing advances  short-term


700,000



791,300Other  short-term


2,196,420



2,019,264Other  long-term(a)


513,732



758,172Total other borrowings


31,148,980



46,184,150Total borrowings

$
44,720,707


$
62,329,891     (a)
    
    Represents borrowings with an original contractual maturity in
    excess of one year. 19




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   (b)
    
    June 30, 2008 and December 31, 2007 totals include
    approximately $92.8 million of senior secured notes and
    $200.0 million of senior unsecured notes, respectively,
    purchased and held by GMAC.(c)
    
    See Note 16  Fair Value 
    $3.0 billion of collateralized borrowings are recorded at
    fair value under SFAS No. 159 as of June 30, 2008.  364-day
         20




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Accounting by Debtors
    and Creditors for Troubled Debt Restructurings
    June 30,


December 31,2008


2007(In thousands)Cash and cash equivalents(a)

$
3,969,288


$
1,411,317Mortgage loans held for sale(b)


6,590,141



10,436,521Trading securities(a)


563,718



751,575Mortgage loans held for investment(b)


38,011,153



39,081,151Lending receivables(b)


7,795,114



6,372,760Mortgage servicing rights(a)


5,021,298



2,673,771Accounts receivable(a)


1,753,038



1,297,891Other assets(a)


7,526,956



7,724,872Total assets restricted as collateral

$
71,230,706


$
69,749,858Related secured debt(c)

$
41,070,168


$
43,982,894     (a)
    
    Disclosed at carrying value or fair value of the underlying
    collateral.(b)
    
    Disclosed at unpaid principal balance of the underlying
    collateral.(c)
    
    Disclosed at cost, net of premium or discount and issuance costs.   21




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    June 30,


December 31,2008


2007(In thousands)Mortgage loans held for sale

$
688,628


$
2,365,646Trading securities


18,513



426,194Mortgage loans held for investment


628,844



3,958,384Accounts receivable


4,911



Other assets






8,597Total

$
1,340,896


$
6,758,821   12.
    Deposit
    Liabilities    June 30,


December 31,2008


2007(In thousands)Non-interest bearing deposits

$
2,129,692


$
1,569,517NOW and money-market checking accounts


3,827,284



3,664,168Certificates of deposit


11,579,963



8,116,159Total

$
17,536,939


$
13,349,844       13.
    Income
    Taxes  and/or
   22




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Accounting for
    Uncertainty in Income Taxes
    14.
    Derivative
    Instruments        Income StatementSix Months Ended June 30,

2008


2007


Classification(In millions)Fair value hedge ineffectiveness gain (loss):Debt obligations

$
17.1


$
(0.8
)

Gain (loss) on investment securitiesMortgage loans held for sale






(0.7
)

Gain (loss) on mortgage loans, netTotal

$
17.1


$
(1.5
)    23




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  15.
    Restructuring
    Charges      Cost PaidLiability


Restructuring


or Otherwise


LiabilityBalance at


Charges Through


Settled Through


Balance atJanuary 1, 2008


June 30, 2008


June 30, 2008


June 30, 2008(In thousands)Restructuring charges:Employee severance

$
23,648


$
36,959


$
(23,112
)

$
37,495Lease terminations and fixed asset write-offs


45,734



936



(11,623
)


35,047Total

$
69,382


$
37,895


$
(34,735
)

$
72,542   16.
    Fair
    Value  Fair
    Value Measurements (SFAS No. 157)
    EITF 02-3.  EITF 02-3 EITF 02-3, EITF 02-3
   24




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Level 1
    Inputs are quoted prices in active markets for identical assets
    or liabilities as of the measurement date. Additionally, the
    entity must have the ability to access the active market and the
    quoted prices cannot be adjusted by the entity.Level 2
    Inputs include quoted prices in active markets for similar
    assets or liabilities; quoted prices in inactive markets for
    identical or similar assets or liabilities; or inputs that are
    observable or can be corroborated by observable market data by
    correlation or other means for substantially the full-term of
    the assets or liabilities.Level 3
    Unobservable inputs are supported by little or no market
    activity. The unobservable inputs represent managements
    best assumptions of how market participants would price the
    assets and liabilities. Generally, Level 3 assets and
    liabilities are valued using pricing models, discounted cash
    flow methodologies, or similar techniques that require
    significant judgment or estimation.    Mortgage loans held for sale
    Loans valued using observable market prices for identical or
    similar assets
  Loans valued using internal models 
 25




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      Trading securities
  Mortgage loans held for investment
      Mortgage servicing rights (MSRs)
 26




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Derivative instruments
      Repossessed, foreclosed and owned assets (other real estate
    owned)
    Investment in automotive operating leases
 27




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    On-balance sheet securitization debt On-balance sheet
    securitizations
    Collateralized Debt Obligations (CDOs) Collateralized
    Debt Obligations
 28




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Recurring
    Fair Value
    Recurring Fair Value MeasurementsAt June 30, 2008Level 1


Level 2


Level 3


Total(In thousands)AssetsTrading securities

$
1,205


$
89,925


$
891,538


$
982,668Mortgage loans held for
    investment(1)










2,658,293



2,658,293Mortgage servicing rights










5,417,361



5,417,361Other assets:Derivative assets


103,115



1,054,178



42,696



1,199,989Other


128,470



128,915



3,238



260,623Total assets

$
232,790


$
1,273,018


$
9,013,126


$
10,518,934LiabilitiesCollateralized borrowings:On-balance sheet securitization
    debt(1)

$



$



$
(2,753,753
)

$
(2,753,753
)Collateralized debt
    obligations(1)










(248,108
)


(248,108
)Other liabilities:Derivative liabilities


(45,967
)


(92,678
)


(36,091
)


(174,736
)Other


(6,308
)










(6,308
)Total liabilities

$
(52,275
)

$
(92,678
)

$
(3,037,952
)

$
(3,182,905
)     (1)
    
    These items are carried at fair
    value due to fair value option election under
    SFAS No. 159. 29




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
     Level 3 Recurring Fair Value MeasurementsSix Months Ended June 30, 2008Change in NetUnrealizedGains(Losses)Includedin NetPurchases,








Income onTotal Gains/(Losses) Included in


Sales,








PortfolioFair Value -





Other


Issuances


Transfers


Fair Value -


Still Held atJanuary 1,


Net


Comprehensive


and


In/Out of


June 30,


June 30,2008


Income(b)


Income


Settlements


Level 3


2008


2008(In thousands)AssetsTrading securities

$
1,642,169


$
(479,322
)(c)

$



$
(271,309
)

$



$
891,538


$
(397,062
)Mortgage loans held for
    investment(a)


6,683,649



(2,587,892
)(d)






(1,437,464
)






2,658,293



(3,266,411
)Mortgage servicing rights


4,713,414



40,711
(e)






663,236







5,417,361



58,006Other assets:Other


3,558







(561
)(f)


241







3,238



Total assets

$
13,042,790


$
(3,026,503
)

$
(561
)

$
(1,045,296
)

$



$
8,970,430


$
(3,605,467
)LiabilitiesCollateralized borrowings:On-balance sheet securitization
    debt(a)

$
(6,734,448
)

$
2,630,962
(d)

$



$
1,349,733


$



$
(2,753,753
)

$
2,865,761Collateralized debt
    obligations(a)


(351,226
)


35,296
(c)






67,822







(248,108
)


43,039Other liabilities:Derivative liabilities, net


(39,064
)


3,105
(c)






42,564







6,605



(70,825
)Total liabilities

$
(7,124,738
)

$
2,669,363


$



$
1,460,119


$



$
(2,995,256
)

$
2,837,975     (a)
    
    Carried at fair value due to fair
    value option election under SFAS No. 159.  (b)
    
    Net income is inclusive of both
    realized and change in unrealized gains and losses as well as
    interest related to the underlying asset or liability.(c)
    
    Fair value adjustment reported in
    (loss) gain on investment securities, net. Accretion income
    reported in interest income.(d)
    
    Fair value adjustment reported in
    other (loss) income and related interest on loans and debt
    reported in interest income and interest expense, respectively.(e)
    
    Reported in servicing asset
    valuation and hedge activities, net.(f)
    
    Change in unrealized gains (losses)
    in available-for-sale securities recorded in equity. 30




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   Nonrecurring
    Fair Value
      Nonrecurring Fair Value MeasurementsAs of June 30, 2008


Total Gains (Losses)Lower of


Included in EarningsCost or


for the Periods EndedTotal


Fair Value or


June 30, 2008Nonrecurring Fair Value Measures


Estimated


Credit


Three


SixLevel 1


Level 2


Level 3


Fair Value


Allowance


Months


Months(In thousands)Mortgage loans held for
    sale(1)

$



$
3,519,899


$
594,428


$
4,114,327


$
(1,022,949
)Lending
    receivables(2)


1,210,418



368,778



155,330



1,734,526



(607,779
)Other assets:Other real estate
    owned(3)






315,515



461,788



777,303



(165,444
)Model home
    portfolio(4)






218,378







218,378






$
(18,629
)

$
(21,350
)Investments in automotive operating leases,
    net(5)










2,384,686



2,384,686







(92,035
)


(92,035
)Investment in used vehicles
    held-for-sale(1)










58,962



58,962



(3,965
)Total

$
1,210,418


$
4,422,570


$
3,655,194


$
9,288,182


$
(1,800,137
)

$
(110,664
)

$
(113,385
)     (1)
    
    Represents assets held for sale
    that are required to be measured at lower of cost or fair value
    in accordance with SFAS No. 65, Accounting for
    Certain Mortgage Banking Activitiesor
    (SOP 01-6,
    Accounting by Certain Entities (Including Entities With Trade
    Receivables) That Lend to or Finance the Activities of
    Others. Only assets with fair values below cost are included
    in the table above. The related valuation allowance represents
    the cumulative adjustment to fair value of those specific loans.(2)
    
    The carrying value for lending
    receivables includes only those lending receivables that have a
    specific reserve established using the fair value of the
    underlying collateral as well as Resort Finance assets impaired
    under SFAS No. 144 held-for-sale treatment. The
    related credit allowance represents the cumulative adjustment to
    fair value of those specific lending receivables.(3)
    
    The allowance provided for other
    real estate owned represents any cumulative valuation
    adjustments recognized to adjust those respective repossessed,
    foreclosed and owned properties to fair value less costs to sell.(4)
    
    The model home portfolio held by
    the Business Capital Group is accounted for as required by
    SFAS No. 144. The losses represent adjustments to fair
    value of that portfolio based on actual sales over the last
    three and six months.(5)
    
    Represents assets impaired under
    SFAS No. 144. The total loss included in earnings for
    the three and six months ended June 30, 2008, represents
    the fair market value adjustments on the portfolio. 31




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   Fair
    Value Option for Financial Assets and Financial Liabilities
    (SFAS No. 159)
        CumulativeEffectAdjustment toJanuary 1, 2008January 1, 2008


Retained


January 1, 2008Carrying Value


Earnings


Fair Value AfterPrior to Adoption


Gain (Loss)


Adoption(In thousands)AssetsMortgage loans held for
    investment(1)

$
10,530,424


$
(3,846,775
)

$
6,683,649LiabilitiesCollateralized borrowings:On-balance sheet securitization debt


(10,367,144
)


3,632,696



(6,734,448
)Collateralized debt obligations


(386,052
)


34,826



(351,226
)Pretax cumulative effect of adopting SFAS No. 159





$
(179,253
)After-tax cumulative effect of adopting SFAS No. 159





$
(178,504
)     (1)
    
    Includes the removal from the
    balance sheet of the $489.0 million of allowance for loan
    losses.  On-balance
    sheet securitizations
  Accounting for Transfers and Servicing
    of Financial Assets and Extinguishments of
    Liabilities  a replacement of FASB Statement
    No. 125
 32




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
           33




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Collateralized
    Debt Obligations
  Consolidation of Variable
    Interest Entities Accounting for Certain Investments in
    Debt and Equity Securities
          Changes in Fair Value Included in the Condensed Consolidated
    Income StatementChange inTotal


Fair ValueGain on


Included


Due toInterest


Interest


Other


Investment


in Net


CreditThree Months Ended June 30, 2008

Income


Expense


(Loss) Income


Securities, Net


Income


RiskMortgage loans held for investment

$
181,978






$
(766,540
)

$



$
(584,562
)

$
(69,754
)(1)Collateralized borrowings:On-balance sheet securitizations






(95,034
)


692,717







597,683



48,109
(2)Collateralized debt obligations






(2,960
)






21,747



18,787




(3)Total

















$
31,908   34




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Changes in Fair Value Included in the Condensed Consolidated
    Income StatementChange inTotal


Fair ValueGain on


Included


Due toInterest


Interest


Other


Investment


in Net


CreditSix Months Ended June 30, 2008

Income


Expense


(Loss) Income


Securities, Net


Income


Risk(In thousands)Mortgage loans held for investment

$
380,458


$



$
(2,968,350
)

$



$
(2,587,892
)

$
(87,655
)(1)Collateralized borrowings:On-balance sheet securitization debt






(209,450
)


2,840,412







2,630,962



69,760
(2)Collateralized debt obligations






(7,743
)






43,039



35,296




(3)Total

















$
78,366     (1)
    
    The credit impact for mortgage
    loans held for investment was quantified by applying internal
    credit loss assumptions to cash flow models.(2)
    
    The credit impact for on-balance
    sheet securitization debt is assumed to be zero until the
    Companys economic interests in a particular securitization
    is reduced to zero, at which point the losses on the underlying
    collateral will be expected to be passed through to third-party
    bondholders. Losses allocated to third-party bondholders,
    including changes in the amount of losses allocated, will result
    in fair value change due to credit. The Company also monitors
    credit ratings and will make credit adjustments to the extent
    any bond classes are downgraded by rating agencies.(3)
    
    The credit impact for
    collateralized debt obligations is assumed to be zero until the
    Companys economic interests in the securitization is
    reduced to zero, at which point the losses projected on the
    underlying collateral will be expected to be passed through to
    the securitizations bonds. The Company also monitors
    credit ratings and will make credit adjustments to the extent
    any bond classes are downgraded by rating agencies.      As of June 30, 2008Difference betweenFair Value and UnpaidFair Value


Unpaid Principal Balance


Principal Balance(In thousands)Mortgage loans held for investment:Total loans

$
2,658,293


$
9,737,624


$
(7,079,331
)Loans 90+ days past due






1,360,821Nonaccrual loans






1,786,289Collateralized borrowings:On-balance sheet securitizations


(2,753,753
)


(9,243,232
)


6,489,479Collateralized debt obligations


(248,108
)


(327,429
)


79,321    35




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  17.
    Related
    Party Transactions         36




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
           37




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
                   38




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  18.
    Subsequent
    Events     Accounting for the Impairment
    or Disposal of Long-Lived Assets,
    
    the sum of (i) proceeds of the assets of the Resort Finance
    business during the three years following the sale by the
    Company, including sales proceeds and principal payments, plus
    (ii) if less than all the assets or business of the Resort
    Finance business have been sold during such three-year period,
    the value of the remaining net assets of the business (whether
    positive or negative) as determined in the reasonable good faith
    judgment of the Chief Financial Officer of GMAC,    
    the basis of GMAC Commercial Finance in the Resort
    Finance business, equal to the sum of (i) approximately
    $1.2 billion, plus (ii) the aggregate principal amount
    of any additional advances to obligors of the Resort Finance
    business after the sale by the Company, plus (iii) any
    accrued but unpaid interest due from such obligors on assets
    sold by GMACCF during such three-year period.    10-year
 39




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    
    On July 21, 2008, each of GMAC, the FIM Entities, IB
    Finance Holding Company, LLC (Holdings), GMAC Bank
    and the FDIC (collectively, the Contracting Parties)
    entered into a Parent Company Agreement (the PA).
    The PA requires GMAC to maintain its capital at a level such
    that the ratio of its total equity to total assets is at least
    5%. The PA defines total equity and total
    assets as total equity and total assets, respectively, as
    reported on GMACs consolidated balance sheet in its
    quarterly and annual reports filed with the United States
    Securities and Exchange Commission. The PA further requires
    GMAC, beginning December 31, 2008, to maintain its capital
    at a level such that the ratio of its tangible equity to
    tangible assets is at least 5%. For this purpose, tangible
    equity means total equity minus goodwill and
    other intangible assets, net of accumulated amortization (other
    than mortgage servicing assets), and tangible assets
    means total assets less all goodwill and other
    intangible assets (other than mortgage servicing assets).
    Further, the PA requires GMAC Bank to obtain FDIC approval prior
    to engaging in certain affiliate transactions, and for any major
    deviation or material change from its business plan for a
    seven-year period. The PA also requires GMAC and Holdings to
    submit certain periodic reports to the FDIC and to consent to
    examinations by the FDIC to monitor compliance with the PA, any
    other agreements executed in conjunction with the
    10-year
    extension of the existing two-year disposition requirement, and
    applicable law.
    On July 21, 2008, the Contracting Parties entered into a
    Capital and Liquidity Maintenance Agreement (the
    CLMA). The CLMA requires capital at GMAC Bank to be
    maintained at a level such that GMAC Banks leverage ratio
    is at least 11% for a three-year period. The CLMA defines
    leverage ratio as the ratio of Tier 1 capital
    to total assets, as those amounts are determined pursuant to
    FDIC regulations related to capital requirements in
    12 C.F.R., Section 325.2. Following the initial
    three-year period, GMAC Bank must continue to be well
    capitalized as defined in 12 C.F.R. Part 325.
    The CLMA further requires GMAC (and such additional Contracting
    Parties acceptable to the FDIC) to extend a $3 billion
    unsecured revolving line of credit to GMAC Bank.   40




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  19.
    Segment
    Information    Residential


Business


International


CorporateFinance


Capital


Business


andThree Months Ended June 30, 2008

Group


Group


Group


Other


Eliminations


Consolidated(In thousands)Net financing revenue

$
59,061


$
(12,272
)

$
51,783


$
41,197


$



$
139,769Other revenue


302,002



(341,272
)


(907,186
)


252,384







(694,072
)Total net revenue


361,063



(353,544
)


(855,403
)


293,581







(554,303
)Provision for loan losses


(166,688
)


(92,009
)


(144,741
)


(63,862
)






(467,300
)Total non-interest expense


(495,212
)


(18,859
)


(117,118
)


(123,507
)






(754,696
)(Loss) income before income taxes and minority interest


(300,837
)


(464,412
)


(1,117,262
)


106,212







(1,776,299
)Income tax (benefit) expense


(14,005
)


(264
)


155,128



(29,520
)






111,339(Loss) income before minority interest


(286,832
)


(464,148
)


(1,272,390
)


135,732







(1,887,638
)Minority interest














(28,119
)






(28,119
)Net (loss) income

$
(286,832
)

$
(464,148
)

$
(1,272,390
)

$
163,851


$



$
(1,859,519
)Total assets

$
41,712,964


$
4,554,442


$
13,579,263


$
30,271,310


$
(17,514,146
)

$
72,603,833Net interest (expense) income from other segments

$
(106,820
)

$
(40,806
)

$
(92,939
)

$
240,565


$



$
   Residential


Business


International


CorporateFinance


Capital


Business


andThree Months Ended June 30, 2007

Group


Group


Group


Other


Eliminations


Consolidated(In thousands)Net financing revenue

$
214,437


$
31,416


$
27,188


$
90,816


$



$
363,857Other revenue


465,556



26,545



99,971



(51,281
)






540,791Total net revenue


679,993



57,961



127,159



39,535







904,648Provision for loan losses


(244,094
)


(32,744
)


(16,809
)


(36,771
)






(330,418
)Total non-interest expense


(588,494
)


(18,778
)


(98,271
)


(33,294
)






(738,837
)(Loss) income before income taxes and minority interest


(152,595
)


6,439



12,079



(30,530
)






(164,607
)Income tax expense (benefit)


47,432



59



(2,686
)


20,183







64,988(Loss) income before minority interest


(200,027
)


6,380



14,765



(50,713
)






(229,595
)Minority interest














24,401







24,401Net (loss) income

$
(200,027
)

$
6,380


$
14,765


$
(75,114
)

$



$
(253,996
)Total assets

$
88,745,833


$
7,608,534


$
13,295,333


$
38,919,637


$
(23,068,373
)

$
125,500,964Net interest (expense) income from other segments

$
(131,944
)

$
(74,692
)

$
(79,917
)

$
286,553


$



$
   41




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Residential


Business


International


CorporateFinance


Capital


Business


andSix Months Ended June 30, 2008

Group


Group


Group


Other


Eliminations


Consolidated(In thousands)Net financing revenue

$
131,174


$
(24,989
)

$
36,855


$
102,344


$



$
245,384Other revenue


1,003,653



(428,873
)


(1,717,704
)


404,557







(738,367
)Total net revenue


1,134,827



(453,862
)


(1,680,849
)


506,901







(492,983
)Provision for loan losses


(284,832
)


(94,957
)


(184,372
)


(205,160
)






(769,321
)Total non-interest expense


(899,943
)


(39,622
)


(248,761
)


(174,660
)






(1,362,986
)(Loss) income before income taxes and minority interest


(49,948
)


(588,441
)


(2,113,982
)


127,081







(2,625,290
)Income tax expense (benefit)


2,967



(415
)


94,038



(13,433
)






83,157(Loss) income before minority interest


(52,915
)


(588,026
)


(2,208,020
)


140,514







(2,708,447
)Minority interest














10,162







10,162Net (loss) income

$
(52,915
)

$
(588,026
)

$
(2,208,020
)

$
130,352


$



$
(2,718,609
)Total assets

$
41,712,964


$
4,554,442


$
13,579,263


$
30,271,310


$
(17,514,146
)

$
72,603,833Net interest (expense) income from other segments

$
(224,237
)

$
(96,864
)

$
(183,926
)

$
505,027


$



$
   Residential


Business


International


CorporateFinance


Capital


Business


andSix Months Ended June 30, 2007

Group


Group


Group


Other


Eliminations


Consolidated(In thousands)Net financing revenue

$
509,644


$
65,981


$
59,676


$
163,438


$



$
798,739Other revenue


401,941



87,278



242,452



(74,944
)






656,727Total net revenue


911,585



153,259



302,128



88,494







1,455,466Provision for loan losses


(726,277
)


(57,442
)


(22,561
)


(69,147
)






(875,427
)Total non-interest expense


(1,277,758
)


(37,606
)


(189,486
)


(60,542
)






(1,565,392
)(Loss) income before income taxes and minority interest


(1,092,450
)


58,211



90,081



(41,195
)






(985,353
)Income tax expense


73,534



318



30,296



31,481







135,629(Loss) income before minority interest


(1,165,984
)


57,893



59,785



(72,676
)






(1,120,982
)Minority interest














43,490







43,490Net (loss) income

$
(1,165,984
)

$
57,893


$
59,785


$
(116,166
)

$



$
(1,164,472
)Total assets

$
88,745,833


$
7,608,534


$
13,295,333


$
38,919,637


$
(23,068,373
)

$
125,500,964Net interest (expense) income from other segments

$
(256,920
)

$
(146,756
)

$
(105,910
)

$
509,586


$



$
  42




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  20.
    Regulatory
    Matters        Minimum to beActual


Well CapitalizedJune 30, 2008

Amount


Ratio


Amount


Ratio(Dollars in millions)


(Dollars in millions)Total capital (Tier 1 + Tier 2) to risk weighted
    assets

$
3,646.0



15.9
%

$
2,289.2



10.0
%Tier 1 capital to risk weighted assets


3,466.5



15.1
%


1,373.5



6.0
%Tier 1 capital to average assets (leveraged ratio)


3,466.5



10.8
%


1,598.6



5.0
%        43




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  21.
    Supplemental
    Financial Information     44




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING BALANCE SHEET
 June 30,
    2008
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Dollars in thousands)ASSETSCash and cash equivalents

$
1,507,282


$
140,703


$
4,952,231


$
(22,363
)

$
6,577,853Mortgage loans held for sale






1,963,375



5,077,508



(5,042
)


7,035,841Trading securities






128,886



853,782







982,668Mortgage loans held for investment, net fair value






3,125,350



27,235,333



(36,294
)


30,324,389Lending receivables, net






449,862



7,619,626







8,069,488Mortgage servicing rights






4,830,013



587,348







5,417,361Accounts receivable, net


1,710



1,521,224



2,215,111



(972,617
)


2,765,428Investments in real estate and other






43,166



947,505







990,671Other assets


126,320



4,996,733



8,596,936



(3,279,855
)


10,440,134Investment in, and loans to, subsidiaries


17,430,396



(1,464,207
)






(15,966,189
)


Total assets

$
19,065,708


$
15,735,105


$
58,085,380


$
(20,282,360
)

$
72,603,833LIABILITIESBorrowings:Borrowings from parent

$
2,750,000


$
6,955,000


$
6,891,937


$
(11,896,937
)

$
4,700,000Borrowings from affiliates


750,000







221,677







971,677Collateralized borrowings in securitization trusts fair value










7,900,050







7,900,050Other borrowings


11,233,012



1,959,296



18,929,212



(972,540
)


31,148,980Total borrowings


14,733,012



8,914,296



33,942,876



(12,869,477
)


44,720,707Deposit liabilities










17,559,302



(22,363
)


17,536,939Other liabilities


265,225



3,277,610



4,620,028



(3,359,557
)


4,803,306Total liabilities


14,998,237



12,191,906



56,122,206



(16,251,397
)


67,060,952Minority interest










1,475,410







1,475,410EQUITYCommon stock and paid-in capital










808,657



(808,657
)


Members interest


6,788,348



9,518,674



3,330,744



(12,849,418
)


6,788,348Preferred membership interests


806,344















806,344Accumulated deficit


(3,568,651
)


(6,017,706
)


(3,686,435
)


9,704,141



(3,568,651
)Accumulated other comprehensive income


41,430



42,231



34,798



(77,029
)


41,430Total equity


4,067,471



3,543,199



487,764



(4,030,963
)


4,067,471Total liabilities, minority interest and equity

$
19,065,708


$
15,735,105


$
58,085,380


$
(20,282,360
)

$
72,603,833  45




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 Three
    Months Ended June 30, 2008
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)RevenueInterest income

$
288,771


$
377,793


$
766,010


$
(286,891
)

$
1,145,683Automotive operating lease income










148,522







148,522Total financing revenue


288,771



377,793



914,532



(286,891
)


1,294,205Interest expense


267,718



367,053



629,824



(287,568
)


977,027Depreciation expense on automotive operating lease income










85,374







85,374Impairment of investment in automotive operating leases










92,035







92,035Net financing revenue


21,053



10,740



107,299



677



139,769Other revenueLoss on mortgage loans, net






(224,786
)


(844,931
)


8,212



(1,061,505
)Servicing fees






349,146



42,689



220



392,055Servicing asset valuation and hedge activities, net






(164,568
)


(20,282
)






(184,850
)Net servicing fees






184,578



22,407



220



207,205Loss on investment securities, net


(2,458
)


(56,643
)


(30,963
)






(90,064
)Real estate related revenues, net






(70
)


18,726







18,656Gain on extinguishment of debt


647,075















647,075Loss on foreclosed real estate






(38,619
)


(36,331
)






(74,950
)Other income (loss)


827



(421,419
)


96,268



(16,165
)


(340,489
)Total other revenue


645,444



(556,959
)


(774,824
)


(7,733
)


(694,072
)Total net revenue


666,497



(546,219
)


(667,525
)


(7,056
)


(554,303
)Provision for loan losses






97,884



369,416







467,300Non-interest expenseCompensation and benefits






115,412



134,724







250,136Professional fees


73,963



68,802



21,970







164,735Data processing and telecommunications






23,860



16,822







40,682Advertising






11,416



7,394







18,810Occupancy






11,860



17,157







29,017Restructuring






(14,867
)


32,548







17,681Other


(38,556
)


191,013



108,574



(27,396
)


233,635Total non-interest expense


35,407



407,496



339,189



(27,396
)


754,696Income (loss) before income taxes and minority interest


631,090



(1,051,599
)


(1,376,130
)


20,340



(1,776,299
)Income tax (benefit) expense


(9,945
)


3,193



118,122



(31
)


111,339Income (loss) before minority interest


641,035



(1,054,792
)


(1,494,252
)


20,371



(1,887,638
)Minority interest










(28,119
)






(28,119
)Income (loss) before equity in net losses of subsidiaries


641,035



(1,054,792
)


(1,466,133
)


20,371



(1,859,519
)Equity in net losses of subsidiaries


(2,500,554
)


(1,443,982
)






3,944,536



Net loss

$
(1,859,519
)

$
(2,498,774
)

$
(1,466,133
)

$
3,964,907


$
(1,859,519
)  46




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 Three
    Months Ended June 30, 2007
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)RevenueInterest income

$
284,458


$
366,360


$
1,585,427


$
(267,515
)

$
1,968,730Automotive operating lease income










123,385







123,385Total financing revenue


284,458



366,360



1,708,812



(267,515
)


2,092,115Interest expense


283,052



303,275



1,343,777



(273,727
)


1,656,377Depreciation expense on automotive operating lease income










71,881







71,881Net financing revenue


1,406



63,085



293,154



6,212



363,857Other revenueGain on mortgage loans, net






17,236



156,056



222



173,514Servicing fees






441,932



12,028



(1,816
)


452,144Servicing asset valuation and hedge activities, net






(150,827
)


(706
)






(151,533
)Net servicing fees






291,105



11,322



(1,816
)


300,611(Loss) gain on investment securities, net


(771
)


(111,146
)


55,443







(56,474
)Real estate related revenues, net






228



137,378







137,606Loss on foreclosed real estate






(20,927
)


(48,811
)






(69,738
)Other income


994



48,932



39,844



(34,498
)


55,272Total other revenue


223



225,428



351,232



(36,092
)


540,791Total net revenue


1,629



288,513



644,386



(29,880
)


904,648Provision for loan losses






88,263



243,972



(1,817
)


330,418Non-interest expenseCompensation and benefits






202,339



148,541







350,880Professional fees






42,813



14,703







57,516Data processing and telecommunications






30,119



15,373







45,492Advertising






23,074



12,023







35,097Occupancy






25,547



13,677







39,224Other


941



143,402



102,410



(36,125
)


210,628Total non-interest expense


941



467,294



306,727



(36,125
)


738,837Income (loss) before income taxes and minority interest


688



(267,044
)


93,687



8,062



(164,607
)Income tax (benefit) expense






(960
)


64,772



1,176



64,988Income (loss) before minority interest


688



(266,084
)


28,915



6,886



(229,595
)Minority interest










24,401







24,401Income (loss) before equity in net losses of subsidiaries


688



(266,084
)


4,514



6,886



(253,996
)Equity in net losses of subsidiaries


(254,684
)


(105,372
)






360,056



Net (loss) income

$
(253,996
)

$
(371,456
)

$
4,514


$
366,942


$
(253,996
)  47




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 Six Months Ended June 30, 2008
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)RevenueInterest income

$
611,034


$
558,185


$
1,793,344


$
(600,856
)

$
2,361,707Automotive operating lease income










295,796







295,796Total financing revenue


611,034



558,185



2,089,140



(600,856
)


2,657,503Interest expense


596,794



604,487



1,547,040



(600,898
)


2,147,423Depreciation expense on automotive operating lease income










172,661







172,661Impairment of investment in automotive operating leases










92,035







92,035Net financing revenue


14,240



(46,302
)


277,404



42



245,384Other revenueLoss on mortgage loans, net






(324,020
)


(1,514,278
)


28,797



(1,809,501
)Servicing fees






711,260



74,924



(2,057
)


784,127Servicing asset valuation and hedge activities, net






262,221



(37,568
)






224,653Net servicing fees






973,481



37,356



(2,057
)


1,008,780Loss on investment securities, net


(32,207
)


(176,685
)


(324,992
)






(533,884
)Real estate related revenues, net






(11,473
)


2,185







(9,288
)Gain on extinguishment of debt


1,126,619















1,126,619Loss on foreclosed real estate






(97,601
)


(62,718
)






(160,319
)Other (loss) income


(154
)


(412,325
)


75,572



(23,867
)


(360,774
)Total other revenue


1,094,258



(48,623
)


(1,786,875
)


2,873



(738,367
)Total net revenue


1,108,498



(94,925
)


(1,509,471
)


2,915



(492,983
)Provision for loan losses






279,109



490,212







769,321Non-interest expenseCompensation and benefits






253,582



258,010







511,592Professional fees


73,963



118,753



32,852







225,568Data processing and telecommunications






48,896



32,282







81,178Advertising






23,818



13,180







36,998Occupancy






24,957



32,253







57,210Restructuring






1,314



36,581







37,895Other


(45,624
)


284,348



210,506



(36,685
)


412,545Total non-interest expense


28,339



755,668



615,664



(36,685
)


1,362,986Income (loss) before income taxes and minority interest


1,080,159



(1,129,702
)


(2,615,347
)


39,600



(2,625,290
)Income tax (benefit) expense


(11,945
)


(517
)


95,650



(31
)


83,157Income (loss) before minority interest


1,092,104



(1,129,185
)


(2,710,997
)


39,631



(2,708,447
)Minority interest










10,162







10,162Income (loss) before equity in net losses of subsidiaries


1,092,104



(1,129,185
)


(2,721,159
)


39,631



(2,718,609
)Equity in net losses of subsidiaries


(3,810,713
)


(2,707,783
)






6,518,496



Net loss

$
(2,718,609
)

$
(3,836,968
)

$
(2,721,159
)

$
6,558,127


$
(2,718,609
)  48




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF INCOME
 Six
    Months Ended June 30, 2007
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)RevenueInterest income

$
548,011


$
810,025


$
3,270,244


$
(524,838
)

$
4,103,442Automotive operating lease income










234,615







234,615Total financing revenue


548,011



810,025



3,504,859



(524,838
)


4,338,057Interest expense


544,985



632,152



2,763,464



(539,040
)


3,401,561Depreciation expense on automotive operating lease income










137,757







137,757Net financing revenue


3,026



177,873



603,638



14,202



798,739Other revenue(Loss) gain on mortgage loans, net






(291,412
)


233,015



(2,726
)


(61,123
)Servicing fees






880,671



22,285



(3,635
)


899,321Servicing asset valuation and hedge activities, net






(452,675
)


(1,212
)






(453,887
)Net servicing fees






427,996



21,073



(3,635
)


445,434(Loss) gain on investment securities, net


(771
)


(91,283
)


75,514







(16,540
)Real estate related revenues, net






13,134



255,754







268,888Loss on foreclosed real estate






(24,248
)


(67,930
)






(92,178
)Other (loss) income


1,822



91,025



81,407



(62,008
)


112,246Total other revenue


1,051



125,212



598,833



(68,369
)


656,727Total net revenue


4,077



303,085



1,202,471



(54,167
)


1,455,466Provision for loan losses






296,267



581,322



(2,162
)


875,427Non-interest expenseCompensation and benefits






414,099



270,692







684,791Professional fees






87,380



28,122







115,502Data processing and telecommunications






62,859



30,507







93,366Advertising






44,978



20,539







65,517Occupancy






46,557



27,418







73,975Other


(159
)


391,311



208,423



(67,334
)


532,241Total non-interest expense


(159
)


1,047,184



585,701



(67,334
)


1,565,392Income (loss) before income taxes and minority interest


4,236



(1,040,366
)


35,448



15,329



(985,353
)Income tax benefit






(4,795
)


140,321



103



135,629Income (loss) before minority interest


4,236



(1,035,571
)


(104,873
)


15,226



(1,120,982
)Minority interest










43,490







43,490Income (loss) before equity in net losses of subsidiaries


4,236



(1,035,571
)


(148,363
)


15,226



(1,164,472
)Equity in net losses of subsidiaries


(1,168,708
)


(249,909
)






1,418,617



Net loss

$
(1,164,472
)

$
(1,285,480
)

$
(148,363
)

$
1,433,843


$
(1,164,472
)  49




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS
 Six
    Months Ended June 30, 2008
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)NET CASH PROVIDED BY OPERATING ACTIVITIES

$
230,235


$
2,850,399


$
2,888,313


$
(136,409
)

$
5,832,538CASH FLOWS FROM INVESTING ACTIVITIES:Net decrease (increase) in lending receivables






485



(3,956
)






(3,471
)Originations and purchases of mortgage loans held for investment






(1,064,460
)


(2,732,997
)


824,085



(2,973,372
)Proceeds from sales and repayments of mortgage loans held for
    investment






1,101,784



3,247,211



(830,278
)


3,518,717Sales of mortgage servicing rights






155,861



18,251







174,112Purchases of and advances to investments in real estate and other






(2,484
)


(13,218
)






(15,702
)Proceeds from sales of and returns of investments in real estate
    and other






896



255,979







256,875Net (increase) decrease in affiliate lending


(266,771
)










266,771



Payment of capital contributions






(29,705
)






29,705



Other, net


21,210



193,629



333,416







548,255Net cash (used in) provided by investing activities


(245,561
)


356,006



1,104,686



290,283



1,505,414CASH FLOWS FROM FINANCING ACTIVITIES:Net increase (decrease) in borrowings from GMAC


2,750,000



(1,394,096
)


3,610,867



(266,771
)


4,700,000Net increase in borrowings from affiliates


750,000







221,677







971,677Net decrease in other short-term borrowings






(1,882,230
)


(7,172,366
)


(1,299
)


(9,055,895
)Repayments of collateralized borrowings in securitization trusts










(1,750,886
)






(1,750,886
)Proceeds from secured aggregation facilities, long-term










160,000







160,000Repayments of secured aggregation facilities, long-term










(465,114
)






(465,114
)Proceeds from other long-term borrowings










2,405,000







2,405,000Repayments of other long-term borrowings


(1,846,190
)






(2,299,457
)






(4,145,647
)Payments of debt issuance costs


(17,132
)






(20,210
)






(37,342
)Extinguishment of long-term borrowings


(2,060,829
)














(2,060,829
)Proceeds from capital contributions










43,969



(29,705
)


14,264Increase in deposit liabilities










4,078,297



110,122



4,188,419Net cash used in financing activities


(424,151
)


(3,276,326
)


(1,188,223
)


(187,653
)


(5,076,353
)Effect of foreign exchange rates on cash and cash equivalents


51,838







(195,398
)


43,901



(99,659
)NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(387,639
)


(69,921
)


2,609,378



10,122



2,161,940CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


1,894,921



210,624



2,342,853



(32,485
)


4,415,913CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
1,507,282


$
140,703


$
4,952,231


$
(22,363
)

$
6,577,853      50




---



##### 



RESIDENTIAL
    CAPITAL, LLC
    NOTES TO CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  RESIDENTIAL
    CAPITAL, LLC
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS
 Six Months Ended June 30, 2007
  Guarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

$
(139,194
)

$
(948,528
)

$
5,121,558


$
33,186


$
4,067,022CASH FLOWS FROM INVESTING ACTIVITIES:Net decrease in lending receivables






1,031,073



2,628,209







3,659,282Originations and purchases of mortgage loans held for investment






(925,994
)


(3,074,652
)


(1,734
)


(4,002,380
)Proceeds from sales and repayments of mortgage loans held for
    investment






901,013



9,585,908



(639
)


10,486,282Purchases of and advances to investments in real estate and other






(3,817
)


(171,365
)






(175,182
)Proceeds from sales of and returns of investments in real estate
    and other






19,234



399,859







419,093Payment of capital contribution


(175,000
)


(214,806
)






389,806



Net increase in affiliate lending


(1,818,073
)










1,818,073



Other, net






434,879



47,444



(683
)


481,640Net cash (used in) provided by investing activities


(1,993,073
)


1,241,582



9,415,403



2,204,823



10,868,735CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in affiliate borrowings






1,712,000



106,073



(1,818,073
)


Net increase (decrease) in other short-term borrowings


166,000



(3,409,053
)


(3,743,086
)






(6,986,139
)Proceeds from issuance of collateralized borrowings in
    securitization trusts






1,186,356



36,748







1,223,104Repayments of collateralized borrowings in securitization trusts










(9,416,405
)






(9,416,405
)Proceeds from secured aggregation facilities, long-term










7,320,797







7,320,797Repayments of secured aggregation facilities, long-term










(11,879,874
)






(11,879,874
)Proceeds from other long-term borrowings


3,853,195







2,708,535







6,561,730Repayments of other long-term borrowings


(1,000,000
)






(788,281
)






(1,788,281
)Payments of debt issuance costs


(18,448
)






(8,508
)






(26,956
)Proceeds from capital contributions


1,000,000







389,806



(389,806
)


1,000,000Dividends paid










(2,474
)


2,474



Decrease in deposit liabilities










830,127



(28,550
)


801,577Net cash provided by (used in) financing activities


4,000,747



(510,697
)


(14,446,542
)


(2,233,955
)


(13,190,447
)Effect of foreign exchange rates on cash and cash equivalents


49,890







(88,797
)


(10,604
)


(49,511
)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


1,918,370



(217,643
)


1,622



(6,550
)


1,695,799CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


832,600



456,895



756,225



(26,873
)


2,018,847CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
2,750,970


$
239,252


$
757,847


$
(33,423
)

$
3,714,646          51




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  General
      Three Months


Six MonthsEnded June 30,


Ended June 30,2008


2007


2008


2007(In millions)Net revenueResidential Finance Group

$
361.1


$
680.0


$
1,134.8


$
911.6Business Capital Group


(353.6
)


58.0



(453.9
)


153.3International Business Group


(855.4
)


127.1



(1,680.8
)


302.1Corporate and Other


293.6



39.5



506.9



88.5Total

$
(554.3
)

$
904.6


$
(493.0
)

$
1,455.5Net income (loss)Residential Finance Group

$
(286.8
)

$
(200.0
)

$
(52.9
)

$
(1,166.0
)Business Capital Group


(464.2
)


6.4



(588.0
)


57.9International Business Group


(1,272.4
)


14.7



(2,208.0
)


59.8Corporate and Other


163.9



(75.1
)


130.3



(116.2
)Total

$
(1,859.5
)

$
(254.0
)

$
(2,718.6
)

$
(1,164.5
)   
    Residential Finance Group.  Our Residential
    Finance Group originates, purchases, sells, securitizes and
    services residential mortgage loans in the United States. The
    segment originates mortgage loans through a retail branch
    network, direct lending centers and mortgage brokers. In
    addition, the segment purchases residential mortgage loans from
    correspondent lenders and other third-parties and provides
    warehouse lending. The loans produced or purchased by this
    segment cover a broad credit spectrum. Prime credit quality
    loans that are produced in conformity with the underwriting
    guidelines of Fannie Mae and Freddie Mac are generally sold to
    one of these government-sponsored enterprises in the form of
    agency guaranteed securitizations. This segment also produces a
    variety of loans that do not conform to the underwriting
    guidelines of Fannie Mae and Freddie Mac. These loans include
    prime non-conforming, nonprime and prime second-lien loans,
    which are generally securitized though the issuance of
    non-agency mortgage-backed and mortgage related asset-backed
    securities. These activities, however, have been significantly
    reduced or eliminated in response to market conditions. This
    segment also provides collateralized lines of credit to other
    originators of residential mortgage loans, which we refer to as
    warehouse lending. This activity has also been reduced. Our
    limited banking activities through the mortgage division of GMAC
    Bank and our real estate brokerage and relocation business are
    included in this segment.
    Business Capital Group.  Our Business Capital
    Group provides financing and equity capital to residential land
    developers and homebuilders and financing to resort developers.
    Due to current market conditions, the origination activities of
    this business are limited. 52




---



##### 




    International Business Group.  Our
    International Business Group includes substantially all of our
    operations outside of the United States. The mortgage loan
    production in the countries in which we operate have been
    suspended, except for insured mortgages in Canada, due to
    current market conditions.
    Corporate and Other.  Our Corporate and Other
    Group primarily consists of the Principal Investment Activity
    (PIA) business and Corporate holding company activities,
    including our debt issuances. The PIA business was previously
    reported as part of the Residential Finance Group segment. The
    PIA business operations primarily represent the loan portfolio
    management of our purchased distressed asset portfolio as well
    as certain other non-performing assets. This business terminated
    its strategy to purchase distressed assets and its existing
    portfolio is being managed into run-off. In addition, our other
    business operations include the automotive division of GMAC
    Bank, which are not significant to our results of operations.
    The revenues and expenses of the automotive division of GMAC
    Bank are eliminated from our net results through minority
    interest.    Significant
    Accounting Estimates
  Fair Value Measurements The Fair Value
    Option for Financial Assets and Financial Liabilities
    Level 1
    
    Inputs are quoted prices in active markets for identical assets
    or liabilities as of the measurement date. Additionally, the
    entity must have the ability to access the active market and the
    quoted prices cannot be adjusted by the entity.Level 2
    
    Inputs include quoted prices in active markets for similar
    assets or liabilities; quoted prices in inactive markets for
    identical or similar assets or liabilities; or inputs that are
    observable or can be corroborated by observable market data by
    correlation or other means for substantially the full term of
    the assets or liabilities.Level 3
    
    Unobservable inputs that are supported by little or no market
    activity. The unobservable inputs represent managements
    best assumptions of how market participants would price the
    assets or liabilities. Generally, Level 3 assets and
    liabilities are valued using pricing models, discounted cash
    flow methodologies, or similar techniques that require
    significant judgment or estimation.   53




---



##### 




    We enter into interest rate lock commitments with borrowers or
    mortgage purchase commitments with correspondent lenders and
    other sellers. These commitments typically are considered
    derivative instruments under GAAP and are accounted for at fair
    value. Due to the underlying attributes of these mortgage loan
    commitments and the fact that they do not trade in any market,
    these derivatives typically are Level 3 items.
    We fund or purchase mortgage loans. We have not elected fair
    value for our mortgage loans held for sale portfolio. Rather,
    the loans are accounted for at lower of cost or market under
    GAAP. The loans are valued differently depending upon the
    underlying characteristics of the loan. Generally speaking,
    loans that will be sold to the agencies and international loans
    where recently negotiated market prices for the pool exist with
    a counterparty are Level 2, while domestic loans that
    cannot be sold to agencies and delinquent loans are Level 3
    due to lack of observable market prices.
    We ultimately sell our mortgage loans included in our held for
    sale portfolio, either to the agencies, to whole loan
    purchasers, or securitization structures. When we sell loans, we
    typically will retain servicing rights. We have opted to carry
    our servicing rights at fair value under SFAS No. 156
    Accounting for Servicing of Financial Assets  an
    amendment of FASB Statement No. 140. Further, when the
    loans are sold into
    off-balance
    sheet securitizations, we will often retain residuals
    and/or
    certain classes of bonds. These retained bonds may include
    interest only strips, principal only securities, or principal
    and interest paying bonds (typically the subordinated bonds),
    all of which are carried at fair value within trading securities
    on our balance sheet. Due to the lack of observable market
    prices or data, our servicing rights and retained interests
    typically are Level 3.
    We have previously executed certain securitizations that have
    not qualified for sale treatment under SFAS No. 140
    Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities  a replacement of
    FASB Statement No. 125. The collateral in these
    securitizations are classified as mortgage loans held for
    investment and the related debt is recorded on our balance
    sheet. We have elected fair value for both the collateral and
    debt in certain of these securitizations. Due to the
    characteristics of the underlying loan collateral (nonprime and
    home equities), the collateral and debt are both classified as
    Level 3.  mortgage-backed asset-backed
  asset-backed
   54




---



##### 



and/or
    Results
    of Operations
  Consolidated
    Results
     55




---



##### 



U.S. Mortgage Loan Production by TypeThree Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar AmtLoans


of Loans


Loans


of Loans


Loans


of Loans


Loans


of Loans(Dollars in millions)Prime conforming


56,260


$
12,187



66,677


$
12,682



126,479


$
27,624



116,766


$
22,251Prime non-conforming


626



419



27,064



9,849



1,353



909



65,735



22,166Prime second-lien


5,152



664



48,907



3,107



12,137



1,465



146,618



8,420Government


21,104



3,759



5,520



828



33,421



5,736



9,682



1,412Nonprime










5,396



685



13



3



25,840



3,944Total U.S. production


83,142


$
17,029



153,564


$
27,151



173,403


$
35,737



364,641


$
58,193     For the Three Months


For the Six MonthsEnded June 30,


Ended June 30,2008


2007


2008


2007(In millions)Purpose:Purchase

$
6,348


$
9,369


$
10,897


$
19,401Non-purchase


10,681



17,782



24,840



38,792$
17,029


$
27,151


$
35,737


$
58,193Interest rate type:Fixed rate

$
15,276


$
19,865


$
32,073


$
40,211Adjustable rate


1,753



7,286



3,664



17,982$
17,029


$
27,151


$
35,737


$
58,193  56




---



##### 



U.S. Mortgage Loan Production by ChannelThree Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar AmtLoans


of Loans


Loans


of Loans


Loans


of Loans


Loans


of Loans(Dollars in millions)Retail branches


13,986


$
2,553



22,304


$
3,501



29,574


$
5,460



41,927


$
6,512Direct lending (other than retail branches)


11,683



2,149



31,749



3,506



24,042



4,340



59,764



6,526Mortgage brokers


9,662



2,096



32,947



6,441



22,993



4,873



69,193



12,825Correspondent lenders and secondary market purchases


47,811



10,231



66,564



13,703



96,794



21,064



193,757



32,330Total U.S. production


83,142


$
17,029



153,564


$
27,151



173,403


$
35,737



364,641


$
58,193     International Mortgage Loan ProductionThree Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar Amt


No. of


Dollar AmtLoans


of Loans


Loans


of Loans


Loans


of Loans


Loans


of Loans(Dollars in millions)United Kingdom


568


$
142



18,648


$
5,100



3,216


$
849



36,437


$
9,625Continental Europe


650



173



10,199



1,919



3,250



852



18,660



3,485Canada


3,137



611



2,953



582



6,102



1,222



4,601



867Other


786



123



2,293



117



1,716



317



4,912



213Total international production


5,141


$
1,049



34,093


$
7,718



14,284


$
3,240



64,610


$
14,190  57




---



##### 



Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Net financing revenue

$
139.8


$
363.9


$
245.4


$
798.7(Loss) gain on mortgage loans, net


(1,061.5
)


173.5



(1,809.5
)


(61.1
)Servicing fees


392.1



452.1



784.1



899.3Servicing asset valuation and hedge activities, net


(184.9
)


(151.5
)


224.7



(453.9
)Net servicing fees


207.2



300.6



1,008.8



445.4Other revenue


160.2



66.6



62.3



272.4Provision for loan losses


(467.3
)


(330.4
)


(769.3
)


(875.4
)Non-interest expense


(754.7
)


(738.8
)


(1,363.0
)


(1,565.4
)Loss before income tax expense and minority interest


(1,776.3
)


(164.6
)


(2,625.3
)


(985.4
)Income tax expense


(111.3
)


(65.0
)


(83.1
)


(135.6
)Loss before minority interest


(1,887.6
)


(229.6
)


(2,708.4
)


(1,121.0
)Minority interest


28.1



(24.4
)


(10.2
)


(43.5
)Net loss

$
(1,859.5
)

$
(254.0
)

$
(2,718.6
)

$
(1,164.5
)   step-up
     58




---



##### 



U.S. Mortgage Loan Servicing PortfolioJune 30,


December 31,2008


2007No. of


Dollar Amt


No. of


Dollar AmtLoans


of Loans


Loans


of Loans(Dollars in millions)Prime conforming


1,584,213


$
237,604



1,655,920


$
267,894Prime non-conforming


247,716



78,287



184,210



55,013Prime second-lien


623,202



27,366



730,930



31,526Government


200,447



23,460



180,352



19,445Nonprime


276,796



31,125



282,258



36,809Total primary servicing portfolio*


2,932,374


$
397,842



3,033,670


$
410,687     *
    
    Excludes loans for which we acted as a subservicer. Subserviced
    loans totaled 178,506 with an unpaid principal balance of
    $36.4 billion at June 30, 2008 and 205,019 with an
    unpaid principal balance of $44.3 billion at
    December 31, 2007.           59




---



##### 



Segment
    Results
  Residential
    Finance Group
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Net financing revenue

$
59.1


$
214.4


$
131.2


$
509.6Gain (loss) on mortgage loans, net


144.2



100.4



272.8



(234.5
)Servicing fees


379.0



436.6



756.8



869.0Servicing asset valuation and hedge activities, net


(184.3
)


(150.8
)


230.6



(452.7
)Net servicing fees


194.7



285.8



987.4



416.3Other revenue


(36.9
)


79.4



(256.6
)


220.2Provision for loan losses


(166.7
)


(244.1
)


(284.8
)


(726.3
)Non-interest expense


(495.2
)


(588.5
)


(899.9
)


(1,277.8
)Income tax benefit (expense)


14.0



(47.4
)


(3.0
)


(73.5
)Net loss

$
(286.8
)

$
(200.0
)

$
(52.9
)

$
(1,166.0
)    60




---



##### 



61




---



##### 



Business
    Capital Group
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Net financing revenue

$
(12.3
)

$
31.4


$
(25.0
)

$
66.0Other revenue


(341.3
)


26.6



(428.9
)


87.3Provision for loan losses


(92.0
)


(32.7
)


(94.9
)


(57.5
)Non-interest expense


(18.9
)


(18.8
)


(39.6
)


(37.6
)Income tax benefit (expense)


0.3



(0.1
)


0.4



(0.3
)Net (loss) income

$
(464.2
)

$
6.4


$
(588.0
)

$
57.9        62




---



##### 



International
    Business Group
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Net financing revenue

$
51.8


$
27.2


$
36.9


$
59.7(Loss) gain on mortgage loans, net


(881.5
)


76.0



(1,564.1
)


182.4Servicing fees


13.4



15.9



27.7



31.0Servicing asset valuation and hedge activities, net


(0.6
)


(0.7
)


(5.9
)


(1.2
)Net servicing fees


12.8



15.2



21.8



29.8Other revenue


(38.6
)


8.7



(175.4
)


30.3Provision for loan losses


(144.7
)


(16.8
)


(184.4
)


(22.6
)Non-interest expense


(117.1
)


(98.3
)


(248.8
)


(189.5
)Income tax (expense) benefit


(155.1
)


2.7



(94.0
)


(30.3
)Net (loss) income

$
(1,272.4
)

$
14.7


$
(2,208.0
)

$
59.8          63




---



##### 



Corporate
    and Other
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Net financing revenue

$
41.2


$
90.8


$
102.3


$
163.4Loss on mortgage loans, net


(324.2
)


(2.8
)


(518.2
)


(9.0
)Other revenue


576.7



(48.4
)


922.8



(65.9
)Provision for loan losses


(63.9
)


(36.8
)


(205.1
)


(69.2
)Non-interest expense


(123.5
)


(33.3
)


(174.7
)


(60.5
)Income tax benefit (expense)


29.5



(20.2
)


13.4



(31.5
)Net income (loss) before minority interest


135.8



(50.7
)


140.5



(72.7
)Minority interest


28.1



(24.4
)


(10.2
)


(43.5
)Net income (loss)

$
163.9


$
(75.1
)

$
130.3


$
(116.2
)      64




---



##### 



65




---



##### 



Asset
    Quality
  Allowance
    for Loan Losses
    Mortgage LoansHeld for


LendingInvestment


Receivables


Other


Total(In millions)Balance at January 1, 2008

$
832.3


$
485.2


$
33.3


$
1,350.8Reduction to allowance due to fair value option election(a)


(489.0
)










(489.0
)Provision for loan losses


624.4



138.3



6.6



769.3Charge-offs


(350.7
)


(140.1
)


(9.2
)


(500.0
)Recoveries


20.9



1.7



4.8



27.4Balance at June 30, 2008

$
637.9


$
485.1


$
35.5


$
1,158.5Balance at January 1, 2007

$
1,508.4


$
396.6


$
25.8


$
1,930.8Provision for loan losses


648.8



220.1



6.5



875.4Charge-offs


(491.1
)


(343.1
)


(5.3
)


(839.5
)Recoveries


29.5



0.5



2.2



32.2Balance at June 30, 2007

$
1,695.6


$
274.1


$
29.2


$
1,998.9Allowance as a percentage of total:June 30, 2008


2.26
%(b)


5.67
%


1.08
%


2.89
%June 30, 2007


2.71
%


2.47
%


1.11
%


2.62
%     (a)
    
    See Note 16  Fair Value 
    $489.0 million of allowance for loan losses was removed
    upon SFAS No. 159 adoption.(b)
    
    As of June 30, 2008, $9.7 billion of unpaid principal
    balance is recorded at a fair value of $2.7 billion under
    SFAS No. 159 with no related allowance for loan losses.
    These loans have been excluded from this calculation.    Allowance for Loan LossesAs of June 30,2008


2007


2008


2007($ in millions)Prime conforming

$
12.7


$
2.5



1.51
%


0.24
%Prime non-conforming


310.1



56.1



1.80



0.53Prime second-lien


120.7



99.4



2.64



1.56Government mortgage loans


2.2



0.0



1.69



4.20Nonprime


192.2



1,537.6



3.51



3.45Total

$
637.9


$
1,695.6



2.26
%


2.71
%  66




---



##### 



Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Mortgage loans:Prime conforming

$
(6.1
)

$
(0.6
)

$
(10.4
)

$
(1.1
)Prime non-conforming


(65.2
)


(6.7
)


(66.4
)


(12.3
)Prime second-lien


(33.0
)


(37.9
)


(48.4
)


(59.6
)Government


(0.2
)






(0.4
)


Nonprime


(85.6
)


(203.0
)


(204.2
)


(388.6
)Lending receivables:Warehouse


(2.2
)


(294.1
)


(17.4
)


(342.6
)Construction


(38.0
)






(121.2
)


Other










0.2



Other


(3.0
)


(1.9
)


(4.4
)


(3.1
)Total net charge-offs

$
(233.3
)

$
(544.2
)

$
(472.6
)

$
(807.3
)          67




---



##### 



Accounting for the
    Impairment or Disposal of Long-Live Assets
    Nonperforming
    Assets
     68




---



##### 



June 30,


December 31,


June 30,2008


2007


2007(In millions)Nonaccrual loans:Mortgage loans:Prime conforming

$
113.9


$
84.7


$
14.4Prime non-conforming


1,582.5



908.0



558.0Prime second-lien


219.2



233.2



161.0Government


57.2



79.8



0.1Nonprime*


3,334.5



4,040.2



8,066.2Lending receivables:Warehouse


160.0



70.8



189.0Construction**


823.0



550.2



130.1Commercial real estate


9.5







Other


0.2



10.4



Total nonaccrual loans


6,300.0



5,977.3



9,118.8Restructured loans


80.3



32.1



34.7Foreclosed assets


971.1



1,115.5



1,591.5Total nonperforming assets

$
7,351.4


$
7,124.9


$
10,745.0Total nonaccrual loans as a percentage of total mortgage loans
    held for investment and lending receivables


13.4
%


11.7
%


12.4
%Total nonperforming assets as a percentage of total consolidated
    assets


10.1
%


8.0
%


8.8
%     *
    
    Includes $126.1 million as of June 30, 2008,
    $1.1 billion as of December 31, 2007 and
    $871.1 million as of June 30, 2007 of loans that were
    purchased distressed and already in nonaccrual status. In
    addition, includes $26.0 million as of June 30, 2008,
    $15.7 million as of December 31, 2007 and
    $8.7 million as of June 30, 2007 of nonaccrued loans
    that are not included in Restructured loans.**
    
    Includes $75.9 million as of June 30, 2008,
    $47.2 million as of December 31, 2007 and
    $0.0 million as of June 30, 2007 of nonaccrual
    restructured loans, that are not included in Restructured
    loans.       69




---



##### 



As of June 30, 2008


As of December 31, 2007


As of June 30, 2007Percent of





Percent of





Percent ofAmount


Total


Amount


Total


Amount


Total(Dollars in millions)Current

$
31,726.6



82.4
%

$
35,557.7



82.6
%

$
48,744.3



78.2
%Past due:30 to 59 days


1,155.2



3.0



1,784.3



4.1



3,939.0



6.360 to 89 days


729.7



1.9



946.4



2.2



1,704.5



2.790 days or more


2,077.4



5.4



2,178.5



5.1



3,048.7



4.9Foreclosures pending


2,089.9



5.4



1,845.8



4.3



3,529.1



5.7Bankruptcies


707.4



1.9



735.4



1.7



1,388.3



2.2Total unpaid principal balance


38,486.2



100.0
%


43,048.1



100.0
%


62,353.9



100.0
%Net (discounts) premiums


(499.4
)






(885.5
)






311.2SFAS No. 159 fair value adjustment


(7,024.5
)














Allowance for loan losses


(637.9
)






(832.3
)






(1,695.6
)Total

$
30,324.4






$
41,330.3






$
60,969.5     As of June 30, 2008


As of December 31, 2007


As of June 30, 2007Percent of





Percent of





Percent ofAmount


Total


Amount


Total


Amount


Total(Dollars in millions)Current

$
9,360.1



67.6
%

$
12,014.1



67.7
%

$
31,952.7



71.7
%Past due:30 to 59 days


806.8



5.8



1,263.2



7.1



3,663.2



8.260 to 89 days


415.9



3.0



693.2



3.9



1,624.1



3.690 days or more


1,022.5



7.4



1,444.5



8.1



2,622.1



5.9Foreclosures pending


1,614.3



11.7



1,641.7



9.3



3,386.0



7.6Bankruptcies


617.4



4.5



690.3



3.9



1,323.0



3.0Total unpaid principal balance


13,837.0



100.0
%


17,747.0



100
%


44,571.1



100.0
%Net (discounts) premiums


(475.1
)






(842.6
)






54.0SFAS No. 159 fair value adjustment


(5,685.7
)














Allowance for loan losses


(192.2
)






(589.1
)






(1,537.6
)Total

$
7,484.0






$
16,315.3






$
43,087.5    70




---



##### 



Unpaid Principal BalanceAs of June 30,


As of December 31,2008


2007(In millions)Mortgage Loans Held for Sale  DomesticHigh loan-to-value (greater than 100%) mortgage loans

$
13.1


$
11.6Interest-only mortgage loans


374.7



663.2Payment option adjustable rate mortgage loans


85.0



1.1Below market initial rate mortgage loans






164.5Total

$
472.8


$
840.4Mortgage Loans Held for Investment 
    DomesticHigh loan-to-value (greater than 100%) mortgage loans

$
2,531.6


$
3,701.6Interest-only mortgage loans


9,621.9



11,448.7Payment option adjustable rate mortgage loans


1,383.2



1,689.6Below market initial rate mortgage loans


369.6



285.7Total

$
13,906.3


$
17,125.6Mortgage Loans  Held for Sale and
    Investment  InternationalHigh loan-to-value (greater than 100%) mortgage loans

$
1,663.8


$
2,182.6Interest-only mortgage loans


3,786.9



6,170.1Payment option adjustable rate mortgage loans






Below market initial rate mortgage loans






Total

$
5,450.7


$
8,352.7    71




---



##### 



Loan Production For the Six Months EndedJune 30,2008


2007(In millions)High loan-to-value (greater than 100%) mortgage loans

$
607.2


$
3,527.8Interest-only mortgage loans


2,650.0



19,512.5Payment option adjustable rate mortgage loans


0.2



6,213.9Below market initial rate mortgage loans


232.5



74.9         Liquidity
    and Capital Resources
  Liquidity
    and Capital Management Highlights through June 30,
    2008
    
    On June 6, 2008, ResCap closed its previously announced
    private debt tender and exchange offers for certain of its
    outstanding debt securities (the Offers).  -
    In connection with the Offers, on June 6, 2008, ResCap
    issued $1.7 billion of 8.500% Senior Secured
    Guaranteed Notes due 2010 and $4.0 billion of 9.625% Junior
    Secured Guaranteed Notes due 2015, in exchange for approximately
    $2.6 billion of senior unsecured notes that mature in
    2008-2009
    and approximately $6.0 billion of its senior unsecured
    notes that mature in
    2010-2015
    (the New Notes). 72




---



##### 



Each series of New Notes are guaranteed by all of ResCaps
    domestic significant subsidiaries (other than GMAC Bank and
    certain other subsidiaries that are restricted from guaranteeing
    the New Notes), as well as all of ResCaps direct
    subsidiaries. The Senior Secured Notes are secured by a second
    priority lien on the collateral securing ResCaps new
    senior secured credit facility with GMAC and the Junior Secured
    Notes are secured by a third priority lien on the same
    collateral.  -
    Holders participating in the exchange offers had the opportunity
    to elect to receive cash in lieu of the New Notes that they
    would have otherwise received, pursuant to a modified
    Dutch auction process. In the Auction Process,
    approximately $1.6 billion of the
    2008-2009
    Notes and $2.6 billion of the
    2010-2015
    Notes were tendered. Based on these results, the clearing price
    in the auction process was $920 per $1,000 principal amount of
    Senior Secured Notes and $650 per $1,000 of Junior Secured Notes
    and approximately 52% of the
    2008-2009
    Notes and approximately 36% of the
    2010-2015
    Notes tendered in the Auction Process at or below the applicable
    clearing price were purchased for cash in lieu of New Notes.-
    Also in connection with the Offers, approx $853.4 million
    of Floating Rate Notes due June 9, 2008 were purchased for
    cash.-
    GMAC contributed notes of ResCap that GMAC had previously
    purchased in open market transactions, during the first and
    second quarters of 2008. Accordingly, the Company recorded a
    capital contribution for GMACs purchase price of
    $970.3 million and a gain of $510.2 million on
    extinguishment of debt for the difference between the carrying
    value and GMACs purchase price. $806.3 million of the
    $970.3 million capital contribution are non-cumulative,
    non-participation perpetual preferred membership interests and
    are recorded in the equity section of our balance sheet. GMAC
    also tendered $92.8 million principal amount of
    ResCaps 8.125% Notes due in 2008, in exchange for New
    Notes.  
    On June 4, 2008, RFC and GMAC Mortgage entered into a GMAC
    senior secured credit facility (the Facility)
    (guaranteed by ResCap and certain of its subsidiaries) to which
    GMAC provides a senior secured credit facility with a capacity
    of up to $3.5 billion. Proceeds of secured revolver were
    used to repay existing debt of ResCap on or prior to its
    maturity, to acquire certain assets, and for working capital
    purposes. Under the Facility, GMAC agreed to make revolving
    loans to RFC and GMAC Mortgage, and acquire $1.3 billion of
    the outstanding $1.75 billion bank term loan due to mature
    on July 28, 2008. ResCap paid the remainder of the Term
    Loan on July 28, 2008 with proceeds of a draw under the
    Facility. Also on June 4, 2008, GMAC entered into a
    Participation Agreement (the Participation
    Agreement) with General Motors Corporation
    (GM) and Cerberus ResCap Financing, LLC
    (Cerberus Fund) collectively the
    Participants. Pursuant to the Participation
    Agreement, GMAC sold GM and Cerberus Fund $750 million in
    subordinated participations in the loans made pursuant to the
    Facility. GM and Cerberus Fund acquired 49% and 51% of the
    Participations, respectively. The Participants will not be
    entitled to receive any principal payments with respect to the
    Participations until the principal portion of the loans retained
    by GMAC have been paid in full. At June 30, 2008, the full
    $3.5 billion in capacity has been utilized, which consisted
    of $2.2 billion in advances under the Facility plus the
    assignment to GMAC of $1.3 billion of outstanding bank term
    loan; $750 million of the $2.2 billion outstanding
    under the Facility was sold and assigned to GM and Cerberus.
    Subsequent to the closing of the Facility, GMAC agreed to extend
    the time for completion of certain post-closing requirements
    under the Facility.
    On April 18, 2008, GMAC entered into a loan and security
    agreement (the MSR Facility) maturing on
    October 17, 2008 with RFC and GMAC Mortgage, LLC to provide
    $750 million to fund mortgage servicing rights. On
    June 1, 2008, GMAC and ResCap entered into an amendment to
    the MSR Facility dated as of April 18, 2008. This
    amendment increased the maximum facility amount from
    $750 million to $1.2 billion and increased the advance
    rate from 50% to 85% with all other terms and provisions of the
    MSR Facility remaining unchanged. In addition to the
    $750 million already outstanding, ResCap drew approximately
    $450 million under the MSR Facility in the second
    quarter of 2008, fully utilizing the $1.2 billion of
    available funding.
    We reached agreement to amend substantially all of our secured
    bilateral facilities thus extending the maturities of these
    facilities from various dates in 2008 to the end of May and
    beginning of June 2009. We 73




---



##### 



entered into a new syndicated $2.5 billion whole loan
    repurchase agreement to fund domestic conforming collateral. The
    facility is set to mature June 3, 2009.  
    On July 2, 2008, the Company and GMAC entered into an
    agreement (the Resort Finance Sale Agreement)
    pursuant to which GMAC Commercial Finance would acquire 100% of
    the Companys resort finance business, including its
    subsidiary, RFC Resort Funding, LLC (collectively, the
    Resort Finance business), for a cash purchase price
    equal to the fair market value of the business. On June 3,
    2008, the Company received an initial deposit of
    $250.0 million, representing estimated net proceeds related
    to this transaction.      -
    the sum of (i) proceeds of the assets of the Resort Finance
    business during the three years following the sale by the
    Company, including sales proceeds and principal payments and
    recoveries, plus (ii) if less than all the assets or
    business of the Resort Finance business have been sold during
    such three-year period, the value of the remaining net assets of
    the business (whether positive or negative) as determined in the
    reasonable good faith judgment of the Chief Financial Officer of
    GMAC,    -
    the basis of GMAC Commercial Finance in the Resort
    Finance business, equal to the sum of (i) approximately
    $1.2 billion, plus (ii) the aggregate principal amount
    of any additional advances to obligors of the Resort Finance
    business after the sale by the Company, plus (iii) any
    accrued but unpaid interest due from such obligors on assets
    sold by GMACCF during such three-year period.    
    In June 2008, Cerberus Capital Management, L.P. or its
    designee(s) (Cerberus) purchased certain assets of
    ResCap with a carrying value of approximately $479 million
    for consideration consisting of $230 million in cash and a
    Series B junior preferred membership interest in a
    newly-formed entity, CMH Holdings, LLC (CMH), which
    is not a subsidiary of ResCap and the managing member of which
    is an affiliate of Cerberus. CMH purchased from ResCap model
    home and lot option assets. CMH is consolidated into ResCap LLC
    under FIN No. 46R as ResCap was determined to be the
    primary beneficiary. In conjunction with this agreement,
    Cerberus has entered into both term and revolving loans with
    CMH. The term loan principal amount is equal to
    $230 million and the revolving loan maximum amount is
    $10 million. The loans will mature on June 30, 2013
    and are secured by a pledge of all of the assets of CMH. At
    June 30, 2008, $221.7 million of the term loan was
    outstanding.
    On June 17, 2008, the Company and GMAC Commercial Finance,
    LLC (GMACCF), a subsidiary of GMAC, agreed to enter into a
    Receivables Factoring Facility (the Receivables
    Facility), whereby, GMACCF agreed to purchase certain
    mortgage servicing advances. The servicing advances are part of
    the primary collateral securing the GMAC senior secured credit
    facility and the New Notes. The proceeds from the Receivables
    Facility were reinvested in additional servicing advances that
    became primary collateral. The agreement provides for the
    purchase of receivables that satisfy certain eligibility
    requirements multiplied by a purchase price rate of 85%. The
    maximum outstanding receivables at any point in time less the
    15% discount, can not exceed $600 million. On June 17,
    2008, GMACCF purchased $586.3 million face amount of
    receivables, resulting in a loss of $88.0 million for the
    Company. The Receivables Facility will mature on June 16,
    2009.  74




---



##### 




    Cerberus has committed to purchase certain assets of ResCap at
    ResCaps option consisting of performing and non-performing
    mortgage loans, mortgage-backed securities and other assets for
    net cash proceeds of $300 million. ResCap has commenced
    identifying the assets proposed to be sold to Cerberus. In
    addition, ResCap intends, but is not obligated, to undertake an
    orderly sale of certain assets of ResCap consisting of
    performing and non-performing mortgage loans and mortgage-backed
    securities in arms-length transactions through the retention of
    nationally recognized brokers. Cerberus has committed to make
    firm bids to purchase the Auction Assets for net cash proceeds
    of $650 million. On July 14 and 15, 2008, GMAC Mortgage
    Corp. agreed to sell securitized excess servicing on two
    populations of loans to Cerberus. The two populations consist of
    $13.8 billion in unpaid principal balance of Freddie Mac
    loans and $24.8 billion in unpaid principal balance of
    Fannie Mae loans, capturing $982 million and
    $591.0 million of notional interest-only securities,
    respectively. The sales closed on July 30, 2008. The net
    proceeds of $167.1 million is the first completed
    transaction in the commitment made by Cerberus for net cash
    proceeds of $300.0 million.  On-going
    Liquidity and Capital Management Focus
      Liquidity
    Management
    
    Liquidity portfolio:  We maintain a portfolio
    of money market instruments to support cash fluctuations, which
    we consider our liquidity portfolio. As of June 30, 2008,
    our liquidity portfolio totaled $1.5 billion, as compared
    with $1.3 billion as of March 31, 2008 and
    $2.2 billion as of December 31, 2007. We view our
    liquidity portfolio as cash readily available to cover operating
    demands from across our business operations. In our view,
    liquidity differs from cash and cash equivalents of
    $6.6 billion in that liquidity does not include cash
    balances within GMAC Bank and operating cash maintained within
    business segments to cover timing related outflows.
    Short- and long-term financing:  We have
    significant short- and long-term financing needs. We manage our
    liquidity by financing our assets in a manner consistent with
    their liquidity profile.  -
    Short-term financing:  We require short-term
    funding to finance our mortgage loans held for sale, lending
    receivables and various other liquid assets. As of June 30,
    2008, the outstanding balance of short-term borrowings totaled
    $8.7 billion, as compared with $17.2 billion as of
    December 31, 2007. 75




---



##### 



-
    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. Our long-term debt typically consists of
    collateralized borrowings in securitization trusts, unsecured
    debt, junior and senior secured debt issued in the public debt
    capital markets.    2016and2008


2009


2010


2011


2012


2013


2014


2015


Thereafter


Total(In millions)UnsecuredDomestic senior unsecured notes

$
275.3


$
194.1


$
1,281.3


$
226.4


$
99.7


$
935.1


$



$
156.6


$



$
3,168.5Domestic subordinated unsecured notes






205.4































205.4International unsecured notes










568.6







167.7



78.5



130.0











944.8Other unsecured long-term debt


2.1



249.1



8.5







174.7



















434.4Unsecured sub-total


277.4



648.6



1,858.4



226.4



442.1



1,013.6



130.0



156.6







4,753.1SecuredDomestic senior secured notes










1,801.4



























1,801.4Domestic junior secured notes






















1,704.3



1,704.3



1,704.3







5,112.9Total

$
277.4


$
648.6


$
3,659.8


$
226.4


$
442.1


$
2,717.9


$
1834.3


$
1,860.9


$



$
11,667.4   Accounting by Debtors
    and Creditors for Troubled Debt Restructurings
  
    Sources of funding:  The funding sources
    utilized are primarily determined by the type of asset financed
    and associated with a particular product or business. These
    sources of liquidity include:  -
    Borrowings from parent and affiliates:  As part
    of the global debt refinancing initiative, ResCap increased its
    reliance on GMAC and our affiliates, GM and Cerberus, in
    providing a source of secured funding, as well as, cash through
    asset sales. There can be no assurances that our parent and
    affiliates will undertake any such actions in the future.-
    Unsecured and secured funding sources at the ResCap parent
    level:  ResCap has historically had access to the
    unsecured debt market to further diversify its funding sources.
    Prior to the private debt tender and exchange offers on
    June 6, 2008, we had been unable to access the long-term
    debt markets due to our weakened credit ratings and corporate
    performance driven by the illiquidity of the capital markets. We
    do not expect our access to the unsecured debt market to return
    in the near future.-
    Non-affiliate secured funding programs:  A
    majority of our assets are pledged as collateral to support
    various funding programs. As a result, sources of funding have
    been developed in the mortgage and asset- 76




---



##### 



backed securities markets. Also, we have obtained liquidity and
    long-term funding in the term securitization market for our held
    for investment mortgage loan portfolio.  -
    Our ability to access the funding capacity of GMAC
    Bank:  GMAC Bank provides us with another source
    of liquidity through its ability to accept deposits, to obtain
    Federal Home Loan Bank (FHLB) advances and to
    purchase federal funds. The financing through the FHLB is
    uncommitted and requests for additional advances are evaluated
    by the FHLB at the time they are received. In July 2008, the
    Federal Deposit Insurance Corporation (FDIC) granted
    a ten year extension of GMAC Banks current ownership.
    While no advances were outstanding as of June 2008, GMAC Bank
    LLC has a $3.0 billion
    364-day
    unsecured revolver with GMAC. This source of liquidity is due to
    mature on November 19, 2008 and its capacity is restricted
    to use by GMAC Bank and unavailable to ResCaps other
    operations.    2016and2008

2009

2010

2011

2012

2013

2014

2015

Thereafter

Total(In millions)FHLB advances

$
1,154.0


$
1,447.0


$
1,367.0


$
815.0


$
2,861.0


$
211.0


$
976.0


$
760.0


$
1,102.0


$
10,693.0     
    Maintaining an active dialogue with the rating
    agencies:  Historically, our ability to meet our
    funding needs has been influenced by the ratings assigned by the
    rating agencies to ResCap and certain obligations issues by
    ResCap and its subsidiaries. Following ResCaps tender
    offer and debt exchange, all four rating agencies completed a
    review of ResCap and released revised ratings. These ratings
    could impact both our ability to access the capital markets as
    well as the cost of funds associated with such transactions. We
    maintain an active dialogue with the rating agencies throughout
    the year and will continue to work closely with them regarding
    our performance and changes in the business environment.
    Interest Rate Management:  The interest rate
    risk profile of our liquidity can be separated from the actual
    debt issuances using derivative financial products. We have
    issued 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.  Capital
    Management
       77




---



##### 



Borrowings
  Outstanding as ofJune 30,


December 31,2008


2007(In millions)Borrowings from parent

$
4,700.0


$
Borrowings from affiliates


971.7



Collateralized borrowings in securitization trusts 
    long-term(a)(c)


7,900.1



16,145.7Senior unsecured notes  long-term(a)(b)


4,113.3



14,550.4Subordinated unsecured note  long-term(a)


205.4



758.3Term loans and revolvers  long-term(a)






1,750.0Bank lines  short-term


227.4



278.3Bank lines  long-term(a)


37.0



33.2Other unsecured  short-term


312.9



347.0Other unsecured  long-term(a)


397.4



629.8Subtotal unsecured borrowings


5,293.4



18,347.0Senior secured notes  long-term(a)(b)


1,801.4



Junior secured notes  long-term(a)


5,112.9



Secured  short-term


8,168.8



15,560.5Secured  long-term(a)


79.4



927.7FHLB  short-term






1,050.0FHLB  long-term(a)


10,693.0



10,299.0Subtotal secured borrowings


25,855.5



27,837.2Total borrowings


44,720.7



62,329.9Bank deposits


17,536.9



13,349.8Total borrowings and deposits


62,257.6



75,679.7Off-balance sheet financings


134,847.3



136,108.3Total

$
197,104.9


$
211,788.0     (a)
    
    Represents borrowings with an original contractual maturity in
    excess of one year.(b)
    
    June 30, 2008 and December 31, 2007 totals include
    approximately $92.8 million of senior secured notes and
    $200.0 million of senior unsecured notes, respectively,
    purchased and held by GMAC.(c)
    
    See Note 16  Fair Value 
    $3.0 billion of collateralized borrowings are recorded at
    fair value under SFAS No. 159 as of June 30, 2008.  Funding
    Sources
  Borrowings
    from Parent
   78




---



##### 



364-day
    Facilities from ParentAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)GMAC senior secured credit facility

$
1,456.5


$



$
1,456.5


$



$



$
GMAC term loan


1,293.5







1,293.5











GMAC secured MSR facility


1,200.0







1,200.0











GMAC Resort Finance facility


750.0







750.0











GMAC Auto Bank facility






3,000.0



3,000.0







3,000.0



3,000.0Total

$
4,700.0


$
3,000.0


$
7,700.0


$



$
3,000.0


$
3,000.0   Borrowings
    from Affiliates
        Facilities from AffiliatesAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)GMAC  senior secured credit facility-Cerberus

$
382.5


$



$
382.5


$



$



$
GMAC  senior secured credit facility- GM


367.5







367.5











Cerberus model home revolving loan






10.0



10.0











Cerberus model home term loan


221.7







221.7











Total

$
971.7


$
10.0


$
981.7


$



$



$
  79




---



##### 



Collateralized
    Borrowings in Securitization Trusts
      Unsecured
    and Secured Funding Facilities
      As of June 30, 2008

As of December 31, 2007Committed

Uncommitted

Total

Committed

Uncommitted

Total(In millions)Unsecured funding facilities

$
19.2


$
788.4


$
807.6


$
3,517.5


$
891.3


$
4,408.8Secured funding facilities


14,513.7



15,081.6



29,595.3



33,178.8



21,583.4



54,762.2        80




---



##### 



Unsecured
    Funding Facilities
    Unsecured Committed FacilitiesAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)Syndicated bank credit facilities

$



$



$



$



$
875.0


$
875.0364-day bank
    credit facilities revolver


















875.0



875.0International bank lines


19.2







19.2



17.5







17.5Bank term loan














1,750.0







1,750.0Total

$
19.2


$



$
19.2


$
1,767.5


$
1,750.0


$
3,517.5   364-day 3-year
    Unsecured Uncommitted FacilitiesAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)Lines of credit

$
245.2


$
15.0


$
260.2


$
243.8


$
23.2


$
267.0International commercial paper


278.2







278.2



301.4







301.4GMAC Bank Fed Funds






210.0



210.0



0.1



219.9



220.0Other


39.0



1.0



40.0



100.9



2.0



102.9Total

$
562.4


$
226.0


$
788.4


$
646.2


$
245.1


$
891.3       Secured
    Funding Facilities
   81




---



##### 



and/or
    Secured Committed FacilitiesAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)Repurchase agreements

$
1,396.5


$
2,733.0


$
4,129.5


$
3,605.2


$
5,313.7


$
8,918.9Receivables Lending Agreement (RLA)














170.0



5,292.6



5,462.6Mortgage Asset Lending Agreement (MALA)














70.0



3,146.4



3,216.4Bank facilities for construction lending receivables


1,227.9



149.1



1,377.0



1,804.8



45.4



1,850.2Bank facility for mortgage servicing rights


1,656.0



172.0



1,828.0



1,444.0



656.0



2,100.0Other


3,852.4



3,326.8



7,179.2



8,633.9



2,996.8



11,630.7Total

$
8,132.8


$
6,380.9


$
14,513.7


$
15,727.9


$
17,450.9


$
33,178.8     Repurchase Agreements:
  RLA and MALA:
  Bank facilities:
  Other:
 82




---



##### 



Bilateral secured facility:
    Secured Uncommitted FacilitiesAs of June 30, 2008


As of December 31, 2007Unused


Total





Unused


TotalOutstanding


Capacity


Capacity


Outstanding


Capacity


Capacity(In millions)Repurchase agreements

$
15.1


$
3,084.9


$
3,100.0


$
368.3


$
7,430.7


$
7,799.0Other


100.3



720.7



821.0



392.0



803.3



1,195.3Total excluding FHLB advances


115.4



3,805.6



3,921.0



760.3



8,234.0



8,994.3FHLB advances


10,693.0



467.6



11,160.6



11,349.0



1,240.1



12,589.1Total

$
10,808.4


$
4,273.2


$
15,081.6


$
12,109.3


$
9,474.1


$
21,583.4     FHLB Advances:
 83




---



##### 



As of June 30, 2008Secured


Secured


TotalSecured


Secured


Total


Committed


Uncommitted


SecuredCommitted


Uncommitted


Secured


Unused


Unused


UnusedOutstanding


Outstanding


Outstanding


Capacity


Capacity


Capacity(In millions)Mortgage loans and warehouse lending(a)

$
4,548.9


$
10,729.0


$
15,277.9


$
6,059.8


$
4,273.2


$
10,333.0Other lending receivables(b)


1,227.9







1,227.9



149.1







149.1Mortgage servicing rights(c)


1,656.0







1,656.0



172.0







172.0Other


700.0



79.4



779.4











Total

$
8,132.8


$
10,808.4


$
18,941.2


$
6,380.9


$
4,273.2


$
10,654.1   As of December 31, 2007Secured


Secured


TotalSecured


Secured


Total


Committed


Uncommitted


SecuredCommitted


Uncommitted


Secured


Unused


Unused


UnusedOutstanding


Outstanding


Outstanding


Capacity


Capacity


Capacity(In millions)Mortgage loans and warehouse lending(a)

$
11,687.7


$
12,014.1


$
23,701.8


$
16,140.8


$
9,474.1


$
25,614.9Other lending receivables(b)


1,804.8







1,804.8



45.4







45.4Mortgage servicing rights(c)


1,444.0







1,444.0



656.0







656.0Other


791.4



95.2



886.6



608.7







608.7Total

$
15,727.9


$
12,109.3


$
27,837.2


$
17,450.9


$
9,474.1


$
26,925.0     (a)
    
    Mortgage loans and warehouse lending is comprised of MALA, RLA,
    repurchase agreements, the Facilities, and FHLB advances.(b)
    
    Facilities that fund construction and commercial business
    lending receivables.(c)
    
    Facilities to fund mortgage servicing rights.  International
    Funding Facilities
      International FacilitiesAs of June 30, 2008

As of December 31, 2007Unused

Total



Unused

TotalOutstanding

Capacity

Capacity

Outstanding

Capacity

Capacity(In millions)Committed international facilities

$
3,559.8


$
3,533.1


$
7,092.9


$
8,460.1


$
2,428.8


$
10,888.9Uncommitted international facilities


623.7



735.8



1,359.5



937.2



826.6



1,763.8  84




---



##### 



Bank
    Deposits
      Off-Balance
    Sheet Financings
               85




---



##### 



Credit
    Ratings
    SeniorUnsecured

Senior

Junior



Date ofRating Agency

Debt

Secured Debt

Secured Debt

Outlook

Last ActionFitch

D

N/R

N/R

N/A

June 4, 2008Moodys

Ca

Caa2

Caa3

Watch ratings-negative

June 16, 2008S&P

CCC-

CCC+

CCC-

Negative

July 15, 2008DBRS

CC (high)

CCC

CC (high)

Negative

June 20, 2008   step-up
    Recently
    Issued Accounting Standards
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.     86




---



##### 



Change in Fair Value as of June 30, 2008Change in Interest Rate (basis points)

−100


−50


+50


+100(In millions)Mortgage servicing rights and other financial instruments:Mortgage servicing rights and other retained interests

$
(1,380
)

$
(633
)

$
483


$
827Impact of servicing hedge:Swap-based


463



207



(154
)


(259
)Treasury-based


38



19



(18
)


(35
)Others


489



271



(312
)


(653
)Mortgage servicing rights and other retained interests, net


(390
)


(136
)


(1
)


(120
)Committed pipeline


43



36



(70
)


(166
)Mortgage loan inventory


89



51



(69
)


(145
)Impact of associated derivative instruments:Mortgage-based


(146
)


(85
)


105



225Eurodollar-based


(6
)


(3
)


3



6Others


(3
)


(1
)


1



3Committed pipeline and mortgage loan inventory, net


(23
)


(2
)


(30
)


(77
)Net change in fair value related to other businesses


2



1



(1
)


(2
)GMAC Bank:Securities portfolio


9



4



(4
)


(9
)Mortgage loans


358



194



(213
)


(438
)Deposit liabilities


(17
)


(9
)


9



18Federal Home Loan Bank advances


(257
)


(130
)


138



282Other liabilities


(16
)


(8
)


8



16GMAC Bank, net


77



51



(62
)


(131
)Notes payable and capital securities


(136
)


(67
)


66



131Impact of associated derivative instruments:Swap-based


11



5



(5
)


(10
)Notes payable and capital securities, net


(125
)


(62
)


61



121Insurance company investment portfolios


2



1



(1
)


(2
)Net change in fair value related to mortgage servicing rights
    and other financial instruments

$
(457
)

$
(147
)

$
(34
)

$
(211
)Net change in fair value related to broker-dealer trading
    securities

$
1


$



$



$
Net change in fair value related to GMAC Auto Bank

$
36


$
18


$
(18
)

$
(36
)   87




---



##### 



Change in Fair Value as of June 30, 2007Change in Interest Rate (basis points)

−100


−50


+50


+100(In millions)Mortgage servicing rights and other financial instruments:Mortgage servicing rights and other retained interests

$
(1,549
)

$
(675
)

$
497


$
831Impact of servicing hedge:Swap-based


755



319



(226
)


(388
)Treasury-based


141



68



(65
)


(128
)Others


588



288



(270
)


(519
)Mortgage servicing rights and other retained interests, net


(65
)


0



(64
)


(204
)Committed pipeline


171



98



(139
)


(320
)Mortgage loan inventory


287



160



(195
)


(420
)Impact of associated derivative instruments:Mortgage-based


(199
)


(117
)


160



364Eurodollar-based


(20
)


(10
)


10



20Others


(131
)


(71
)


75



157Committed pipeline and mortgage loan inventory, net


108



60



(89
)


(199
)Net change in fair value related to other businesses


5



3



(4
)


(6
)GMAC Bank:Securities portfolio


14



7



(7
)


(13
)Mortgage loans


257



140



(153
)


(316
)Deposit liabilities


(17
)


(8
)


8



16Federal Home Loan Bank advances


(212
)


(109
)


118



243Other liabilities


(13
)


(6
)


6



13GMAC Bank, net


29



24



(28
)


(57
)Notes payable and capital securities


(364
)


(179
)


175



346Impact of associated derivative instruments:Swap-based


375



185



(179
)


(353
)Notes payable and capital securities, net


11



6



(4
)


(7
)Insurance company investment portfolios


2



1



(1
)


(3
)Net change in fair value related to mortgage servicing rights
    and other financial instruments

$
90


$
94


$
(190
)

$
(476
)Net change in fair value related to broker-dealer trading
    securities

$
1


$
1


$
(2
)

$
(4
)    88




---



##### 



Item 4.
    Controls
    and Procedures.  Rule 13a-15(e)
  Rule 13a-15(f)
   89




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings.    Kessler.
  Murray.
 90




---



##### 



Mitchell.
        TBW. and/or
  Federal Trade Commission.
 91




---



##### 



Item 1A.
    Risk
    Factors.  Form 10-K Form 10-Q
  Risks
    Related to Our Business
  We
    have significant near-term liquidity issues. There is a
    significant risk that we will not be able to meet our debt
    service obligations and other funding obligations in the
    near-term.
        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.
     92




---



##### 



We
    have a significant amount of existing debt and may incur
    significant additional debt, including secured debt, in the
    future, which could adversely affect our financial condition and
    our ability to react to changes in our business.
      
    Require us to dedicate a significant portion of our cash flow
    from operating activities to payments on our and our
    subsidiaries debt, which will reduce our funds available
    for working capital, capital expenditures and other general
    corporate expenses;
    limit our flexibility in planning for, or reacting to, changes
    in our business, the residential mortgage industry and the
    economy at large;
    place us at a disadvantage as compared to our competitors that
    have proportionately less debt or that are able to incur or
    refinance debt or more favorable terms;
    make us vulnerable to interest rate increases, because a portion
    of our borrowings are, and will continue to be, at variable
    rates of interest;
    expose us to increased interest expense as we refinance existing
    lower interest rate instruments;
    adversely affect our relationship with customers and
    suppliers; and
    make it more difficult for us to satisfy our obligations to the
    holders of our notes and for our subsidiaries to satisfy their
    guarantee obligations where applicable.   93




---



##### 



Our
    current ratings could adversely affect our ability to raise
    capital in the debt markets at attractive rates which could
    negatively impact our results of operations and financial
    condition.
  step-up
    A
    significant portion of our operating cash from time to time may
    be derived from funds provided to us as credit support by
    parties to various hedging arrangements. In the event interest
    rates change, we may be required to repay promptly all or a
    portion of such amounts.
    Current
    conditions in the residential mortgage market and housing
    markets may continue to adversely affect our earnings and
    financial condition.
   94




---



##### 



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.
         95




---



##### 



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. As
    long as our access to the securitization market and our ability
    to execute whole loan sales remain constrained, the period
    during which we are exposed to these risks will be extended, and
    our earnings may decrease as a result.
    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 and relocation services, which may reduce the income
    we receive from these services.
    Rising interest rates could result in a significant margin call
    under our hedging arrangements, which would require us to
    provide the counterparty with additional cash collateral. 96




---



##### 



Our
    hedging strategies may not be successful in mitigating our risks
    associated with changes in interest rates.
  and/or
    Recent
    negative developments in our mortgage markets have led us to
    reduce the number of mortgage products we offer.
    Our
    profitability and financial condition could be adversely
    affected if the assumptions underlying our risk-based
    underwriting and pricing models prove to be
    incorrect.
   97




---



##### 



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 may
    be required to repurchase mortgage loans or indemnify investors
    if we breach representations and warranties, which could harm
    our profitability.
    General
    business and economic conditions may significantly and adversely
    affect our revenues, profitability and financial
    condition.
   98




---



##### 



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.
     99




---



##### 



Our
    business outside the United States exposes us to additional
    risks that may cause our revenues and profitability to
    decline.
    
    country specific market conditions resulting in further asset
    valuation volatility and liquidity constraints;
    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;
    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.      We are
    exposed to capital markets risk related to changes in foreign
    exchange rates which may adversely affect our results of
    operations, financial condition or cash flows.
    non-U.S. subsidiaries
  Our
    business capital activities expose us to additional risks that
    may adversely affect our revenues and
    profitability.
   100




---



##### 




    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.     101




---



##### 



A
    significant portion of our business is in the States of
    California and Florida, and our business may be significantly
    harmed by a slowdown in the economy or the occurrence of a
    natural disaster in California or Florida.
        If
    GMAC were 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.
      The
    profitability and financial condition of our parent, and
    indirectly our business, are dependent upon the on-going
    operations of General Motors Corporation.
   102




---



##### 



and/or
  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 (including consumer refunds) and litigation,
    including class action lawsuits;
    governmental investigations and enforcement actions; and
    claims that an allegedly non-compliant loan is rescindable or
    unenforceable.    New
    and proposed legislation and court rulings with respect to
    so-called predatory lending practices and other lending
    practices could restrict our ability to produce mortgage loans
    or service, which could harm our revenues and
    profitability.
   103




---



##### 



and/or 2 28 3 27
 104




---



##### 



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.
    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.
  and/or
    GMAC
    and certain of our owners are subject to regulatory agreements
    that may affect our control of GMAC Bank.
   105




---



##### 



10-year 10-year 10-year
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.    Item 3.
    Defaults
    Upon Senior Securities.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Item 5.
    Other
    Information.    Item 6.
    Exhibits.   106




---



##### 



SIGNATURES  th
     /s/  James
    N. Young   Chief Financial Officer
  
   Chief Accounting Officer and Controller
 107




---



##### 



INDEX OF
    EXHIBITS  Exhibit

Description4
.1

Second Supplemental Subordinated Indenture dated as of
    May 16, 20084
.2

Third Supplemental Indenture dated as of May 16, 20084
.3

Indenture dated as of June 6, 2008 for 8.500% Senior
    Secured Guaranteed Notes Due 20104
.4

Indenture dated as of June 6, 2008 for 9.625% Junior
    Secured Guaranteed Notes Due 20154
.5

Second Priority Pledge and Security Agreement and Irrevocable
    Proxy dated as of June 6, 20084
.6

Third Priority Pledge and Security Agreement and Irrevocable
    Proxy dated as of June 6, 20084
.7

Intercreditor Agreement dated as of June 6, 200810
.1

Guarantee of Residential Capital, LLC dated as of April 18,
    200810
.2

Loan and Security Agreement dated as of April 18, 200810
.3

Amendment dated as of May 21, 2008 to the Loan and Security
    Agreement10
.4

Amendment No. 2 dated as of May 22, 2008 to the Loan
    and Security Agreement10
.5

Amendment No. 3 dated as of June 2, 2008 to the Loan
    and Security Agreement10
.6

Amendment No. 4 dated as of July 25, 2008 to the Loan
    and Security Agreement10
.7

Loan Agreement dated as of June 4, 200810
.8

Servicer Advance Receivables Factoring Agreement dated as of
    June 17, 200810
.9

Purchase Agreement among Residential Capital, LLC, GMAC Model
    Home Finance I, LLC and CMH Holdings LLC dated as of
    June 6, 200810
.10

Operating Agreement Waiver dated as of June 13, 200810
.11

First Priority Pledge and Security Agreement and Irrevocable
    Proxy dated as of June 4, 200812
.1

Computation of ratio of earnings to fixed charges31
.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)    32

Certification of Principal Executive Officer and Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350  108