##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549-1004


FORM 10-Q


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
| 
|  |  | For the quarterly period ended September 30, 2007, or                                       
| 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the transition period
    from           to           .                                 

Commission file number:
0-51438


RESIDENTIAL CAPITAL, LLC


(Exact name of registrant as specified in its charter)


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

8400 Normandale Lake Boulevard


Minneapolis, MN


55437


(Address of principal executive offices)


(Zip Code)


(952) 857-8700


(Registrants telephone number, including area code)


þ o


12b-2


o o þ


o þ




Reduced Disclosure Format












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RESIDENTIAL CAPITAL, LLC


INDEX


|                                                  |  |                                                                                                                     |    |      |    | 
|------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                                  |  |                                                                                                                     |    | Page |   
|                                                  |  |                                                                                                                     |    |      |   
|Part I  Financial
    Information                |  |                                                                                                                     |    |     
|Item 1.                                           |  | Financial Statements (unaudited)                                                                                    |    |      |    | 
|                                                  |  | Condensed Consolidated Balance Sheet as of
    September 30, 2007 and December 31, 2006                             |    |      | 3  | 
|                                                  |  | Condensed Consolidated Statement of Income
    for the Three and Nine Months Ended September 30, 2007 and
    2006  |    |      | 4  | 
|                                                  |  | Condensed Consolidated Statement of Changes
    in Equity for the Nine Months Ended September 30, 2007 and
    2006 |    |      | 5  | 
|                                                  |  | Condensed Consolidated Statement of Cash
    Flows for the Nine Months Ended September 30, 2007 and
    2006        |    |      | 6  | 
|                                                  |  | Notes to Condensed Consolidated Financial
    Statements                                                            |    |      | 8  | 
|Item 2.                                           |  | Managements Discussion and Analysis
    of Financial Condition and Results of
    Operations                       |    |      | 32 | 
|Item 3.                                           |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                      |    |      | 58 | 
|Item 4.                                           |  | Controls and Procedures                                                                                             |    |      | 61 | 
|Part II  Other
    Information                   |  |                                                                                                                     |    |     
|Item 1.                                           |  | Legal Proceedings                                                                                                   |    |      | 62 | 
|Item 1A.                                          |  | Risk Factors                                                                                                        |    |      | 64 | 
|Item 2.                                           |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                     |    |      | 67 | 
|Item 3.                                           |  | Defaults Upon Senior Securities                                                                                     |    |      | 67 | 
|Item 4.                                           |  | Submission of Matters to a Vote of Security
    Holders                                                             |    |      | 67 | 
|Item 5.                                           |  | Other Information                                                                                                   |    |      | 67 | 
|Item 6.                                           |  | Exhibits                                                                                                            |    |      | 67 | 
|Signatures                                        |  |                                                                                                                     | 68 |     
|Index of Exhibits                                 |  |                                                                                                                     | 69 |     
|Asset Purchase Agreement                         
|Computation of Ratio of Earnings to Fixed Charges
|Certification of Principal Executive Officer     
|Certification of Principal Financial Officer     
|Section 1350 Certifications                      







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##### Table of Contents






PART I  FINANCIAL INFORMATION





Item 1.  Financial Statements.


RESIDENTIAL CAPITAL, LLC





CONDENSED CONSOLIDATED BALANCE SHEET


September 30, 2007 and December 31, 2006


|                                                |                                                    |                        |             |            |              |   |             |            |             | 
|----------------------------------------------- | -------------------------------------------------- | ---------------------- | ----------- | ---------- | ------------ | - | ----------- | ---------- | ----------- | 
|                                                |                                                    | September 30,          |             |            | December 31, |  
|                                                |                                                    | 2007                   |             |            | 2006         |  
|                                                |                                                    |                        |             |            |              |  
|                                                |                                                    | (Unaudited)            |             |            |             
|                                                |                                                    | (Dollars in thousands) |            
|ASSETS                                         
|Cash and cash equivalents                       |                                                    | $                      | 6,519,488   |            |              | $ | 2,018,847   |           
|Mortgage loans held for sale                    |                                                    |                        | 14,979,699  |            |              |   | 27,007,382  |           
|Trading securities                              |                                                    |                        | 3,654,506   |            |              |   | 4,562,073   |           
|Mortgage loans held for investment, net         |                                                    |                        | 59,037,772  |            |              |   | 67,927,951  |           
|Lending receivables, net                        |                                                    |                        | 8,436,517   |            |              |   | 14,530,104  |           
|Mortgage servicing rights                       |                                                    |                        | 5,547,034   |            |              |   | 4,930,061   |           
|Accounts receivable                             |                                                    |                        | 2,582,505   |            |              |   | 2,561,200   |           
|Investments in real estate and other            |                                                    |                        | 2,069,176   |            |              |   | 2,622,149   |           
|Goodwill                                        |                                                    |                        |            |            |              |   | 471,463     |           
|Other assets                                    |                                                    |                        | 11,666,696  |            |              |   | 8,955,589   |           
|                                                |                                                    |                        |             |            |              |  
|Total assets                                    |                                                    | $                      | 114,493,393 |            |              | $ | 135,586,819 |           
|                                                |                                                    |                        |             |            |              |  
|                                               
|LIABILITIES                                    
|Borrowings:                                     |                                                    |                        |             |            |              |   |             |           
|                                                | Collateralized borrowings in securitization trusts |                        | $           | 38,223,889 |              |   | $           | 53,299,518 |            
|                                                | Other borrowings                                   |                        |             | 49,657,090 |              |   |             | 59,880,378 |            
|                                                |                                                    |                        |             |            |              |  
|                                                |                                                    | Total borrowings       |             |            | 87,880,979   |   |             |            | 113,179,896 | 
|Deposit liabilities                             |                                                    |                        | 14,488,261  |            |              |   | 9,851,026   |           
|Other liabilities                               |                                                    |                        | 4,793,722   |            |              |   | 4,374,006   |           
|                                                |                                                    |                        |             |            |              |  
|Total liabilities                               |                                                    |                        | 107,162,962 |            |              |   | 127,404,928 |           
|Minority interest                               |                                                    |                        | 1,158,876   |            |              |   | 559,778     |           
|EQUITY                                         
|Members interest                               |                                                    |                        | 5,861,684   |            |              |   | 3,837,943   |           
|Retained earnings                               |                                                    |                        | 226,183     |            |              |   | 3,651,935   |           
|Accumulated other comprehensive income          |                                                    |                        | 83,688      |            |              |   | 132,235     |           
|                                                |                                                    |                        |             |            |              |  
|Total equity                                    |                                                    |                        | 6,171,555   |            |              |   | 7,622,113   |           
|                                                |                                                    |                        |             |            |              |  
|Total liabilities, minority interest and equity |                                                    | $                      | 114,493,393 |            |              | $ | 135,586,819 |           
|                                                |                                                    |                        |             |            |              |  



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RESIDENTIAL CAPITAL, LLC





CONDENSED CONSOLIDATED STATEMENT OF INCOME


|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |   |  |   |           |  
|------------------------------------------------------------- |  | ---------------------- | ---------- | - | ----------------- | - | --------- | ---- |  | - | ---------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended     |            |   | Nine Months Ended |  
|                                                              |  | September 30,          |            |   | September 30,     |  
|                                                              |  |                        |            |   |                   |  
|                                                              |  | 2007                   |            |   | 2006              |   |           | 2007 |  |   | 2006       |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|                                                              |  | (Unaudited)            |           
|                                                              |  | (Dollars in thousands) |           
|Revenue                                                       |  |                        |            |   |                   |   |           |      |  |   |            |   |  |   |           |  
|Interest income                                               |  | $                      | 1,886,006  |   |                   | $ | 2,085,558 |      |  | $ | 5,989,448  |   |  | $ | 5,958,845 |  
|Interest expense                                              |  |                        | 1,680,746  |   |                   |   | 1,703,606 |      |  |   | 5,082,307  |   |  |   | 4,696,869 |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Net interest income                                           |  |                        | 205,260    |   |                   |   | 381,952   |      |  |   | 907,141    |   |  |   | 1,261,976 |  
|Provision for loan losses                                     |  |                        | 884,213    |   |                   |   | 238,723   |      |  |   | 1,759,640  |   |  |   | 484,060   |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Net interest income (loss) after provision for loan losses    |  |                        | (678,953   | ) |                   |   | 143,229   |      |  |   | (852,499   | ) |  |   | 777,916   |  
|Gain (loss) on sale of mortgage loans, net                    |  |                        | (569,589   | ) |                   |   | 236,755   |      |  |   | (630,712   | ) |  |   | 878,788   |  
|Servicing fees                                                |  |                        | 451,420    |   |                   |   | 401,095   |      |  |   | 1,350,741  |   |  |   | 1,162,263 |  
|Servicing asset valuation and hedge activities, net           |  |                        | (123,439   | ) |                   |   | (331,338  | )    |  |   | (577,326   | ) |  |   | (687,611  | )
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Net servicing fees                                            |  |                        | 327,981    |   |                   |   | 69,757    |      |  |   | 773,415    |   |  |   | 474,652   |  
|Gain (loss) on investment securities, net                     |  |                        | (332,511   | ) |                   |   | 141,729   |      |  |   | (349,051   | ) |  |   | 124,768   |  
|Real estate related revenues                                  |  |                        | 23,505     |   |                   |   | 162,228   |      |  |   | 292,393    |   |  |   | 493,458   |  
|Gain (loss) on sale of equity investments                     |  |                        |           |   |                   |   |          |      |  |   | (542       | ) |  |   | 414,508   |  
|Other income                                                  |  |                        | 46,667     |   |                   |   | 38,943    |      |  |   | 301,892    |   |  |   | 144,259   |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Total net revenue                                             |  |                        | (1,182,900 | ) |                   |   | 792,641   |      |  |   | (465,104   | ) |  |   | 3,308,349 |  
|                                                             
|Expenses                                                      |  |                        |            |   |                   |   |           |      |  |   |            |   |  |   |           |  
|Compensation and benefits                                     |  |                        | 306,034    |   |                   |   | 298,949   |      |  |   | 990,825    |   |  |   | 981,410   |  
|Professional fees                                             |  |                        | 57,119     |   |                   |   | 74,752    |      |  |   | 172,621    |   |  |   | 193,563   |  
|Data processing and telecommunications                        |  |                        | 64,126     |   |                   |   | 48,140    |      |  |   | 157,492    |   |  |   | 140,630   |  
|Advertising                                                   |  |                        | 29,700     |   |                   |   | 34,396    |      |  |   | 95,217     |   |  |   | 119,548   |  
|Occupancy                                                     |  |                        | 34,345     |   |                   |   | 33,962    |      |  |   | 108,320    |   |  |   | 100,641   |  
|Goodwill impairment                                           |  |                        | 454,828    |   |                   |   |          |      |  |   | 454,828    |   |  |   |          |  
|Other                                                         |  |                        | 226,756    |   |                   |   | 153,471   |      |  |   | 896,754    |   |  |   | 405,353   |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Total expenses                                                |  |                        | 1,172,908  |   |                   |   | 643,670   |      |  |   | 2,876,057  |   |  |   | 1,941,145 |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Income (loss) before income tax expense and minority interest |  |                        | (2,355,808 | ) |                   |   | 148,971   |      |  |   | (3,341,161 | ) |  |   | 1,367,204 |  
|Income tax expense (benefit)                                  |  |                        | (119,442   | ) |                   |   | 65,538    |      |  |   | 16,187     |   |  |   | 534,129   |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Income (loss) before minority interest                        |  |                        | (2,236,366 | ) |                   |   | 83,433    |      |  |   | (3,357,348 | ) |  |   | 833,075   |  
|Minority interest                                             |  |                        | 24,561     |   |                   |   |          |      |  |   | 68,051     |   |  |   |          |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  
|Net Income (loss)                                             |  | $                      | (2,260,927 | ) |                   | $ | 83,433    |      |  | $ | (3,425,399 | ) |  | $ | 833,075   |  
|                                                              |  |                        |            |   |                   |   |           |      |  |   |            |  



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RESIDENTIAL CAPITAL, LLC





CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Nine Months Ended September 30, 2007 and 2006


|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |   |         |         |   |   |           |            |         |  
|------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | --------- | - | -------- | - | --------- | --------- | - | - | ------------- | ---------- | ---- | ------------- | ------- | ---------- | ------- | - | ------- | ------- | - | - | --------- | ---------- | ------- | -
|                                                                                           |                                                                                                 | Common                                                                     |           |   |          |   |           |           |   |   | Accumulated   |            |      |              
|                                                                                           |                                                                                                 | Stock and                                                                  |           |   |          |   |           |           |   |   | Other         |            |      |              
|                                                                                           |                                                                                                 | Paid-in                                                                    |           |   | Members |   |           | Retained  |   |   | Comprehensive |            |      | Comprehensive |         |            | Total   |  
|                                                                                           |                                                                                                 | Capital                                                                    |           |   | Interest |   |           | Earnings  |   |   | Income        |            |      | Income        |         |            | Equity  |  
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|                                                                                           |                                                                                                 | (Unaudited)                                                                |           |   |         
|                                                                                           |                                                                                                 | (Dollars in thousands)                                                     |           |   |         
|Balance at January 1, 2007                                                                 |                                                                                                 | $                                                                          |          |   |          | $ | 3,837,943 |           |   | $ | 3,651,935     |            |      |               |         |            |         | $ | 132,235 |         |   | $ | 7,622,113 |           
|                                                                                           | Net loss                                                                                        |                                                                            |           |  |          |   |           |          |   |   |               | (3,425,399 | )    |               | $       | (3,425,399 | )       |   |         |        |   |   |           | (3,425,399 | )      
|                                                                                           | Cumulative 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    | )
|                                                                                           | Capital contribution                                                                            |                                                                            |           |  |          |   |           | 2,023,741 |   |   |               |           |      |               |         |           |         |   |         |        |   |   |           | 2,023,741  |        
|                                                                                           | Other comprehensive income, net of tax:                                                         |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |   |         |         |   |   |           |            |        
|                                                                                           |                                                                                                 | Unrealized gain on available for sale securities                           |           |   |         |   |           |           |  |   |               |            |     |               |         |            | 1,639   |   |         |         |  |   |           |            | 1,639   |  
|                                                                                           |                                                                                                 | Foreign currency translation adjustment                                    |           |   |         |   |           |           |  |   |               |            |     |               |         |            | 4,533   |   |         |         |  |   |           |            | 4,533   |  
|                                                                                           |                                                                                                 | Unrealized loss on cash flow hedges                                        |           |   |         |   |           |           |  |   |               |            |     |               |         |            | (54,719 | ) |         |         |  |   |           |            | (54,719 | )
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|                                                                                           | Other comprehensive income                                                                      |                                                                            |           |  |          |   |           |          |   |   |               |           |      |               |         | (48,547    | )       |   |         | (48,547 | ) |   |           |           |        
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|                                                                                           | Comprehensive income                                                                            |                                                                            |           |  |          |   |           |          |   |   |               |           |      |               | $       | (3,473,946 | )       |   |         |        |   |   |           |           |        
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|Balance at September 30, 2007                                                              |                                                                                                 | $                                                                          |          |   |          | $ | 5,861,684 |           |   | $ | 226,183       |            |      |               |         |            |         | $ | 83,688  |         |   | $ | 6,171,555 |           
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|                                                                                          
|Balance at January 1, 2006                                                                 |                                                                                                 | $                                                                          | 3,367,677 |   |          | $ |          |           |   | $ | 3,980,587     |            |      |               |         |            |         | $ | 115,706 |         |   | $ | 7,463,970 |           
|Cumulative effect of change in accounting principle as of
    January 1, 2006, net of tax: |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |   |         |         |   |   |           |           
|                                                                                           | Transfer of unrealized loss for certain available for sale
    securities to trading securities |                                                                            |           |  |          |   |           |          |   |   |               | (16,717    | )    |               | $       |           |         |   |         | 16,717  |   |   |           |           |        
|                                                                                           | Recognize mortgage servicing rights at fair value                                               |                                                                            |           |  |          |   |           |          |   |   |               | 3,850      |      |               |         | 3,850      |         |   |         |        |   |   |           | 3,850      |        
|Net income                                                                                 |                                                                                                 |                                                                            |          |   |          |   |          |           |   |   | 833,075       |            |      |               | 833,075 |            |         |   |         |         |   |   | 833,075   |           
|Capital contributions                                                                      |                                                                                                 |                                                                            | 89,728    |   |          |   |          |           |   |   |              |            |      |               |        |            |         |   |        |         |   |   | 89,728    |           
|Other comprehensive income, net of tax:                                                    |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |   |         |         |   |   |           |           
|                                                                                           | Unrealized gain on available for sale securities                                                |                                                                            |           |  |          |   |           |          |   |   |               |           |      |               |         | 1,190      |         |   |         |        |   |   |           | 1,190      |        
|                                                                                           | Foreign currency translation adjustment                                                         |                                                                            |           |  |          |   |           |          |   |   |               |           |      |               |         | 27,758     |         |   |         |        |   |   |           | 27,758     |        
|                                                                                           | Unrealized loss on cash flow hedges                                                             |                                                                            |           |  |          |   |           |          |   |   |               |           |      |               |         | (43,698    | )       |   |         |        |   |   |           | (43,698    | )      
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|Other comprehensive income                                                                 |                                                                                                 |                                                                            |          |   |          |   |          |           |   |   |              |            |      |               | (14,750 | )          |         |   | (14,750 | )       |   |   |          |           
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|Comprehensive income                                                                       |                                                                                                 |                                                                            |          |   |          |   |          |           |   |   |              |            |      | $             | 822,175 |            |         |   |        |         |   |   |          |           
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  
|Balance at September 30, 2006                                                              |                                                                                                 | $                                                                          | 3,457,405 |   |          | $ |          |           |   | $ | 4,800,795     |            |      |               |         |            |         | $ | 117,673 |         |   | $ | 8,375,873 |           
|                                                                                           |                                                                                                 |                                                                            |           |   |          |   |           |           |   |   |               |            |      |               |         |            |         |  



5



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##### Table of Contents



RESIDENTIAL CAPITAL, LLC





CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


Nine Months Ended September 30, 2007 and 2006


|                                                                                                |                                                     |                        |             |            |      |   |              |             |  
|----------------------------------------------------------------------------------------------- | --------------------------------------------------- | ---------------------- | ----------- | ---------- | ---- | - | ------------ | ----------- | -
|                                                                                                |                                                     | 2007                   |             |            | 2006 |  
|                                                                                                |                                                     |                        |             |            |      |  
|                                                                                                |                                                     | (Unaudited)            |            
|                                                                                                |                                                     | (Dollars in thousands) |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                           |                                                     |                        |             |            |      |   |              |            
|Net income (loss)                                                                               |                                                     | $                      | (3,425,399  | )          |      | $ | 833,075      |            
|Reconciliation of net income (loss) to net cash provided by
    (used in) operating activities: |                                                     |                        |             |            |      |   |              |            
|                                                                                                | Depreciation and amortization                       |                        |             | 704,151    |      |   |              | 517,939     |  
|                                                                                                | Provision for loan losses                           |                        |             | 1,759,640  |      |   |              | 484,060     |  
|                                                                                                | (Gain) loss on sale of mortgage loans, net          |                        |             | 630,712    |      |   |              | (878,788    | )
|                                                                                                | (Gain) loss on sale of equity investments           |                        |             | 542        |      |   |              | (414,508    | )
|                                                                                                | Net (gain) loss on sale of other assets             |                        |             | 223,567    |      |   |              | (37,834     | )
|                                                                                                | Pension curtailment gain                            |                        |             |           |      |   |              | (42,630     | )
|                                                                                                | Goodwill impairment                                 |                        |             | 454,828    |      |   |              |            |  
|                                                                                                | Minority interest                                   |                        |             | 68,051     |      |   |              |            |  
|(Gain) loss on investment securities, net                                                       |                                                     |                        | 349,051     |            |      |   | (124,768     | )          
|Equity in earnings of investees in excess of cash received                                      |                                                     |                        | (9,825      | )          |      |   | (76,283      | )          
|Loss on valuation of mortgage servicing rights                                                  |                                                     |                        | 521,783     |            |      |   | 469,301      |            
|Originations and purchases of mortgage loans held for sale                                      |                                                     |                        | (96,722,925 | )          |      |   | (128,562,265 | )          
|Proceeds from sales and repayments of mortgage loans held for
    sale                          |                                                     |                        | 99,257,968  |            |      |   | 110,519,623  |            
|Deferred income tax                                                                             |                                                     |                        | (80,990     | )          |      |   | 395,903      |            
|Net change in:                                                                                  |                                                     |                        |             |            |      |   |              |            
|                                                                                                | Trading securities                                  |                        |             | 301,914    |      |   |              | 510,405     |  
|                                                                                                | Accounts receivable                                 |                        |             | (96,478    | )    |   |              | (410,634    | )
|                                                                                                | Other assets                                        |                        |             | (2,340,340 | )    |   |              | (222,123    | )
|                                                                                                | Other liabilities                                   |                        |             | 304,659    |      |   |              | 712,396     |  
|                                                                                                |                                                     |                        |             |            |      |  
|                                                                                                | Net cash provided by (used in) operating activities |                        |             | 1,900,909  |      |   |              | (16,327,131 | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                           |                                                     |                        |             |            |      |   |              |            
|Net (increase) decrease in lending receivables                                                  |                                                     |                        | 5,183,237   |            |      |   | (711,078     | )          
|Originations and purchases of mortgage loans held for
    investment                            |                                                     |                        | (6,733,288  | )          |      |   | (13,316,455  | )          
|Proceeds from sales and repayments of mortgage loans held for
    investment                    |                                                     |                        | 14,136,594  |            |      |   | 18,963,106   |            
|Additions to mortgage servicing rights                                                          |                                                     |                        | (3,192      | )          |      |   | (11,772      | )          
|Sales of mortgage servicing rights                                                              |                                                     |                        | 165,557     |            |      |   |             |            
|Purchase of and advances to investments in real estate and other                                |                                                     |                        | (197,769    | )          |      |   | (1,453,387   | )          
|Proceeds from sales of and returns of investments in real estate
    and other                  |                                                     |                        | 619,105     |            |      |   | 1,194,851    |            
|Other, net                                                                                      |                                                     |                        | 1,850,562   |            |      |   | 630,870      |            
|                                                                                                |                                                     |                        |             |            |      |  
|                                                                                                | Net cash provided by investing activities           |                        |             | 15,020,806 |      |   |              | 5,296,135   |  



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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


Nine Months Ended September 30, 2007 and
2006  (Continued)


|                                                                                   |                                                     |                        |             |             |      |   |             |            | 
|---------------------------------------------------------------------------------- | --------------------------------------------------- | ---------------------- | ----------- | ----------- | ---- | - | ----------- | ---------- | 
|                                                                                   |                                                     | 2007                   |             |             | 2006 |  
|                                                                                   |                                                     |                        |             |             |      |  
|                                                                                   |                                                     | (Unaudited)            |            
|                                                                                   |                                                     | (Dollars in thousands) |            
|CASH FLOWS FROM FINANCING ACTIVITIES                                               |                                                     |                        |             |             |      |   |             |           
|Net decrease in affiliate borrowings                                               |                                                     | $                      |            |             |      | $ | (5,177,462  | )         
|Net increase (decrease) in other short-term borrowings                             |                                                     |                        | (11,663,051 | )           |      |   | 2,762,517   |           
|Proceeds from issuance of collateralized borrowings in
    securitization trusts   |                                                     |                        | 3,937,055   |             |      |   | 17,682,004  |           
|Repayments of collateralized borrowings in securitization trusts                   |                                                     |                        | (13,467,761 | )           |      |   | (16,947,238 | )         
|Proceeds from secured aggregation facilities, long-term                            |                                                     |                        | 12,158,635  |             |      |   | 18,956,393  |           
|Repayments of secured aggregation facilities, long-term                            |                                                     |                        | (16,210,746 | )           |      |   | (19,962,782 | )         
|Proceeds from other long-term borrowings                                           |                                                     |                        | 7,860,770   |             |      |   | 11,835,110  |           
|Repayments of other long-term borrowings                                           |                                                     |                        | (2,654,264  | )           |      |   | (406,716    | )         
|Payment of debt issuance costs                                                     |                                                     |                        | (21,308     | )           |      |   | (101,814    | )         
|Capital contributions                                                              |                                                     |                        | 2,256,000   |             |      |   |            |           
|Disposal of healthcare business, net                                               |                                                     |                        | 898,794     |             |      |   |            |           
|Increase in deposit liabilities                                                    |                                                     |                        | 4,637,235   |             |      |   | 2,134,359   |           
|                                                                                   |                                                     |                        |             |             |      |  
|                                                                                   | Net cash provided by (used in) financing activities |                        |             | (12,268,641 | )    |   |             | 10,774,371 | 
|Effect of foreign exchange rates on cash and cash equivalents                      |                                                     |                        | (152,433    | )           |      |   | (32,286     | )         
|                                                                                   |                                                     |                        |             |             |      |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                               |                                                     |                        | 4,500,641   |             |      |   | (288,911    | )         
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                   |                                                     |                        | 2,018,847   |             |      |   | 2,266,753   |           
|                                                                                   |                                                     |                        |             |             |      |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                         |                                                     | $                      | 6,519,488   |             |      | $ | 1,977,842   |           
|                                                                                   |                                                     |                        |             |             |      |  
|SUPPLEMENTAL DISCLOSURES FOR NON-CASH TRANSACTIONS:                                |                                                     |                        |             |             |      |   |             |           
|Available for sale securities transferred to trading securities                    |                                                     | $                      |            |             |      | $ | 927,141     |           
|Mortgage loans held for sale transferred to mortgage loans held
    for investment |                                                     |                        | 8,376,506   |             |      |   | 13,257,100  |           
|Mortgage loans held for investment transferred to mortgage loans
    held for sale |                                                     |                        | 645,877     |             |      |   | 2,148,876   |           
|Mortgage loans held for investment transferred to other assets                     |                                                     |                        | 2,295,243   |             |      |   | 1,206,233   |           
|Deconsolidation of loans (see Note 5)                                              |                                                     |                        | 5,358,653   |             |      |   |            |           
|Deconsolidation of collateralized borrowings (see Note 5)                          |                                                     |                        | 5,440,595   |             |      |   |            |           
|Originations of mortgage servicing rights from sold loans                          |                                                     |                        | 1,303,752   |             |      |   | 1,269,212   |           
|Capital contributions of lending receivables                                       |                                                     |                        | 264,749     |             |      |   | 89,728      |           



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RESIDENTIAL CAPITAL, LLC





NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)




|   |                      
|-- | ---------------------
|1. | Basis of Presentation





10-K




Recently Issued Accounting
Standards


Statement of Financial Accounting Standards
No. 157 Fair Value Measurements


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


8



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




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


FASB Staff Position
(FSP) FIN No. 39-1 39-1, Amendment of FASB Interpretation No. 39. 39-1 39-1


FSP
FIN No. 48-1 48-1, Definition of Settlement in FASB Interpretation
No. 48. 48-1 48-1 48-1


SEC Staff Accounting
Bulletin No. 109 Written Loan Commitments Recorded at Fair Value Through
Earnings Application of Accounting Principles to Loan Commitments Accounting for Servicing of Financial
Assets,


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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)








|   |                               
|-- | ------------------------------
|2. | Change in Accounting Principle

Accounting for Uncertainty in Income Taxes Accounting for Income Taxes








|   |                             
|-- | ----------------------------
|3. | Mortgage Loans Held for Sale



|                     |  |                |            |  |              |   |            | 
|-------------------- |  | -------------- | ---------- |  | ------------ | - | ---------- | 
|                     |  | September 30,  |            |  | December 31, |  
|                     |  | 2007           |            |  | 2006         |  
|                     |  |                |            |  |              |  
|                     |  | (In thousands) |           
|Prime conforming     |  | $              | 2,809,539  |  |              | $ | 2,171,782  | 
|Prime non-conforming |  |                | 7,795,252  |  |              |   | 12,606,382 | 
|Nonprime             |  |                | 2,935,888  |  |              |   | 8,548,213  | 
|Prime second-lien    |  |                | 737,828    |  |              |   | 2,991,471  | 
|Government           |  |                | 701,192    |  |              |   | 689,534    | 
|                     |  |                |            |  |              |  
|Total                |  | $              | 14,979,699 |  |              | $ | 27,007,382 | 
|                     |  |                |            |  |              |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|   |                   
|-- | ------------------
|4. | Trading Securities



|                                     |  |                |           |   |              |   |           |  
|------------------------------------ |  | -------------- | --------- | - | ------------ | - | --------- | -
|                                     |  | September 30,  |           |   | December 31, |  
|                                     |  | 2007           |           |   | 2006         |  
|                                     |  |                |           |   |              |  
|                                     |  | (In thousands) |          
|Mortgage and asset-backed securities |  | $              | 1,255,885 |   |              | $ | 1,748,328 |  
|U.S. Treasury securities             |  |                | 29,515    |   |              |   | 400,962   |  
|Principal-only securities            |  |                | 962,707   |   |              |   | 956,741   |  
|Residual interests                   |  |                | 979,785   |   |              |   | 1,018,895 |  
|Interest-only securities             |  |                | 408,446   |   |              |   | 369,484   |  
|Other                                |  |                | 18,168    |   |              |   | 67,663    |  
|                                     |  |                |           |   |              |  
|Total                                |  | $              | 3,654,506 |   |              | $ | 4,562,073 |  
|                                     |  |                |           |   |              |  
|Net unrealized losses                |  | $              | (223,131  | ) |              | $ | (10,118   | )
|Pledged as collateral                |  |                | 2,510,742 |   |              |   | 3,681,269 |  







|   |                                   
|-- | ----------------------------------
|5. | Mortgage Loans Held for Investment



|                               |       |                |            |            |              |   |            |            | 
|------------------------------ | ----- | -------------- | ---------- | ---------- | ------------ | - | ---------- | ---------- | 
|                               |       | September 30,  |            |            | December 31, |  
|                               |       | 2007           |            |            | 2006         |  
|                               |       |                |            |            |              |  
|                               |       | (In thousands) |           
|Prime conforming               |       | $              | 1,257,400  |            |              | $ | 988,448    |           
|Prime non-conforming           |       |                | 14,529,954 |            |              |   | 9,060,112  |           
|Nonprime                       |       |                | 37,074,464 |            |              |   | 52,340,739 |           
|Prime second-lien              |       |                | 7,720,743  |            |              |   | 7,046,301  |           
|Government                     |       |                | 189,428    |            |              |   | 712        |           
|                               |       |                |            |            |              |  
|                               | Total |                |            | 60,771,989 |              |   |            | 69,436,312 | 
|Less allowance for loan losses |       |                | (1,734,217 | )          |              |   | (1,508,361 | )         
|                               |       |                |            |            |              |  
|Total, net                     |       | $              | 59,037,772 |            |              | $ | 67,927,951 |           
|                               |       |                |            |            |              |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities






|   |                    
|-- | -------------------
|6. | Lending Receivables



|                               |                       |                |           |           |              |   |            |            | 
|------------------------------ | --------------------- | -------------- | --------- | --------- | ------------ | - | ---------- | ---------- | 
|                               |                       | September 30,  |           |           | December 31, |  
|                               |                       | 2007           |           |           | 2006         |  
|                               |                       |                |           |           |              |  
|                               |                       | (In thousands) |          
|Construction:                  |                       |                |           |           |              |   |            |           
|                               | Residential           |                | $         | 3,175,613 |              |   | $          | 2,697,171  | 
|                               | Residential mezzanine |                |           | 353,078   |              |   |            | 380,830    | 
|                               | Resort                |                |           | 253,023   |              |   |            | 133,716    | 
|                               |                       |                |           |           |              |  
|Total construction             |                       |                | 3,781,714 |           |              |   | 3,211,717  |           
|Warehouse                      |                       |                | 1,794,659 |           |              |   | 8,804,803  |           
|Commercial business            |                       |                | 2,348,609 |           |              |   | 1,699,694  |           
|Commercial real estate         |                       |                | 738,564   |           |              |   | 335,938    |           
|Healthcare (See Note 13)       |                       |                |          |           |              |   | 761,983    |           
|Other                          |                       |                | 98,906    |           |              |   | 112,610    |           
|                               |                       |                |           |           |              |  
|                               | Total                 |                |           | 8,762,452 |              |   |            | 14,926,745 | 
|Less allowance for loan losses |                       |                | (325,935  | )         |              |   | (396,641   | )         
|                               |                       |                |           |           |              |  
|Total, net                     |                       | $              | 8,436,517 |           |              | $ | 14,530,104 |           
|                               |                       |                |           |           |              |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






|   |                          
|-- | -------------------------
|7. | Allowance for Loan Losses



|                                                           |  |                |           |   |             |   |          |       |  |   |        |   |  |   |            |  
|---------------------------------------------------------- |  | -------------- | --------- | - | ----------- | - | -------- | ----- |  | - | ------ | - |  | - | ---------- | -
|                                                           |  | Mortgage Loans |           |   |             |   |          |       | 
|                                                           |  | Held for       |           |   | Lending     |   |          |       |  |  
|                                                           |  | Investment     |           |   | Receivables |   |          | Other |  |   | Total  |  
|                                                           |  |                |           |   |             |   |          |       |  |   |        |  
|                                                           |  | (In thousands) |          
|Balance at January 1, 2007                                 |  | $              | 1,508,361 |   |             | $ | 396,641  |       |  | $ | 25,757 |   |  | $ | 1,930,759  |  
|Provision for loan losses                                  |  |                | 1,436,316 |   |             |   | 313,465  |       |  |   | 9,859  |   |  |   | 1,759,640  |  
|Charge-offs                                                |  |                | (943,880  | ) |             |   | (393,088 | )     |  |   | (8,069 | ) |  |   | (1,345,037 | )
|Reduction of allowance due to deconsolidation (See Note 5) |  |                | (306,474  | ) |             |   |         |       |  |   |       |   |  |   | (306,474   | )
|Recoveries                                                 |  |                | 39,894    |   |             |   | 8,917    |       |  |   | 3,674  |   |  |   | 52,485     |  
|                                                           |  |                |           |   |             |   |          |       |  |   |        |  
|Balance at September 30, 2007                              |  | $              | 1,734,217 |   |             | $ | 325,935  |       |  | $ | 31,221 |   |  | $ | 2,091,373  |  
|                                                           |  |                |           |   |             |   |          |       |  |   |        |  
|                                                          
|Balance at January 1, 2006                                 |  | $              | 1,065,906 |   |             | $ | 187,407  |       |  | $ |       |   |  | $ | 1,253,313  |  
|Provision for loan losses                                  |  |                | 470,479   |   |             |   | 13,581   |       |  |   |       |   |  |   | 484,060    |  
|Charge-offs                                                |  |                | (482,413  | ) |             |   | (5,642   | )     |  |   |       |   |  |   | (488,055   | )
|Recoveries                                                 |  |                | 34,213    |   |             |   | 795      |       |  |   |       |   |  |   | 35,008     |  
|                                                           |  |                |           |   |             |   |          |       |  |   |        |  
|Balance at September 30, 2006                              |  | $              | 1,088,185 |   |             | $ | 196,141  |       |  | $ |       |   |  | $ | 1,284,326  |  
|                                                           |  |                |           |   |             |   |          |       |  |   |        |  

13



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|   |                          
|-- | -------------------------
|8. | Mortgage Servicing Rights



|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |        |   |  |   |           |          |  
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------ | --------- | -------- | ---------- | - | --------- | ------------- | - | - | ------------ | ------ | - | ----- | ------ | - |  | - | --------- | -------- | -
|                                                   |                                                                                   | Mortgage Servicing |           |          |            |   |          
|                                                   |                                                                                   | Rights Managed By  |           |          |            |   |          
|                                                   |                                                                                   |                    |           |          |            |   |          
|                                                   |                                                                                   | GMAC               |           |          | GMAC RFC   |   |           | International |   |   |              |        |  
|                                                   |                                                                                   | Residential        |           |          | Holding    |   |           | Business      |   |   |              |        |  
|                                                   |                                                                                   | Holding            |           |          | (Domestic) |   |           | Group         |   |   | Eliminations |        |   | Total |       
|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |       
|                                                   |                                                                                   | (In thousands)     |          
|Estimated fair value at January 1, 2007            |                                                                                   | $                  | 3,752,733 |          |            | $ | 1,164,585 |               |   | $ | 12,743       |        |   | $     |       |   |  | $ | 4,930,061 |         
|Additions obtained from sales of mortgage loans(a) |                                                                                   |                    | 975,479   |          |            |   | 323,282   |               |   |   | 4,991        |        |   |       |       |   |  |   | 1,303,752 |         
|Additions from purchases of servicing assets       |                                                                                   |                    | 12,483    |          |            |   |          |               |   |   |             |        |   |       | (9,291 | ) |  |   | 3,192     |         
|Subtractions from disposals                        |                                                                                   |                    | (165,557  | )        |            |   |          |               |   |   |             |        |   |       |       |   |  |   | (165,557  | )       
|Changes in fair value:                             |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |        |   |  |   |           |         
|                                                   | Due to changes in valuation inputs or assumptions used in the
    valuation model |                    |           | (112,396 | )          |   |           | 58,060        |   |   |              | (1,352 | ) |       |        |  |  |   |           | (55,688  | )
|                                                   | Other changes in fair value                                                       |                    |           | (216,086 | )          |   |           | (246,928      | ) |   |              | (3,081 | ) |       |        |  |  |   |           | (466,095 | )
|Other changes that affect the balance              |                                                                                   |                    |          |          |            |   | (12,959   | )             |   |   | 1,037        |        |   |       | 9,291  |   |  |   | (2,631    | )       
|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |       
|Estimated fair value at September 30, 2007         |                                                                                   | $                  | 4,246,656 |          |            | $ | 1,286,040 |               |   | $ | 14,338       |        |   | $     |       |   |  | $ | 5,547,034 |         
|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |       
|                                                  
|Estimated fair value at January 1, 2006            |                                                                                   | $                  | 3,056,446 |          |            | $ | 959,708   |               |   | $ | 4,850        |        |   | $     |       |   |  | $ | 4,021,004 |         
|Additions obtained from sales of mortgage loans    |                                                                                   |                    | 864,197   |          |            |   | 403,110   |               |   |   | 1,905        |        |   |       |       |   |  |   | 1,269,212 |         
|Additions from purchases of servicing assets       |                                                                                   |                    | 11,772    |          |            |   |          |               |   |   |             |        |   |       |       |   |  |   | 11,772    |         
|Changes in fair value:                             |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |        |   |  |   |           |         
|                                                   | Due to changes in valuation inputs or assumptions used in the
    valuation model |                    |           | 81,915   |            |   |           | (2,341        | ) |   |              | (407   | ) |       |        |  |  |   |           | 79,167   |  
|                                                   | Other changes in fair value                                                       |                    |           | (321,915 | )          |   |           | (226,019      | ) |   |              | (534   | ) |       |        |  |  |   |           | (548,468 | )
|Other changes that affect the balance              |                                                                                   |                    |          |          |            |   | (5,031    | )             |   |   | 369          |        |   |       |       |   |  |   | (4,662    | )       
|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |       
|Estimated fair value at September 30, 2006         |                                                                                   | $                  | 3,692,415 |          |            | $ | 1,129,427 |               |   | $ | 6,183        |        |   | $     |       |   |  | $ | 4,828,025 |         
|                                                   |                                                                                   |                    |           |          |            |   |           |               |   |   |              |        |   |       |       






|    |                                                 
|--- | ------------------------------------------------
|(a) | See Note 5  Mortgage Loans Held for Investment.



14



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






|                                  |  |                  |           |          |            |  |               |          |  |  |          |  
|--------------------------------- |  | ---------------- | --------- | -------- | ---------- |  | ------------- | -------- |  |  | -------- | -
|                                  |  |                  |           | GMAC-RFC |            |  | International |         
|                                  |  | GMAC Residential |           |          | Holding    |  |               | Business | 
|September 30, 2007                |  | Holding          |           |          | (Domestic) |  |               | Group    | 
|                                  |  |                  |           |          |            |  |               |          | 
|Weighted average prepayment speed |  |                  | 16.6      | %        |            |  | 26.7          | %        |  |  | 8.5      | %
|Range of prepayment speeds        |  |                  | 15.4-40.4 | %        |            |  | 15.3- 53.6    | %        |  |  | 0.4-28.4 | %
|Weighted average discount rate    |  |                  | 8.0       | %        |            |  | 10.7          | %        |  |  | 11.7     | %
|Range of discount rates           |  |                  | 7.7-12.9  | %        |            |  | 9.5-11.2      | %        |  |  | 8.0-13.0 | %

|                                  |  |                  |           |          |            |  |               |          |  |  |          |  
|--------------------------------- |  | ---------------- | --------- | -------- | ---------- |  | ------------- | -------- |  |  | -------- | -
|                                  |  |                  |           | GMAC-RFC |            |  | International |         
|                                  |  | GMAC Residential |           |          | Holding    |  |               | Business | 
|September 30, 2006                |  | Holding          |           |          | (Domestic) |  |               | Group    | 
|                                  |  |                  |           |          |            |  |               |          | 
|Weighted average prepayment speed |  |                  | 14.0      | %        |            |  | 28.0          | %        |  |  | 10.4     | %
|Range of prepayment speeds        |  |                  | 12.2-43.2 | %        |            |  | 13.0- 38.6    | %        |  |  | 5.2-20.7 | %
|Weighted average discount rate    |  |                  | 8.8       | %        |            |  | 12.4          | %        |  |  | 8.0      | %
|Range of discount rates           |  |                  | 8.5-12.9  | %        |            |  | 12.0- 14.0    | %        |  |  | 8.0-8.0  | %



|                                                      |  |                  |            |          |            |  |               |          |  |  |          |  
|----------------------------------------------------- |  | ---------------- | ---------- | -------- | ---------- |  | ------------- | -------- |  |  | -------- | -
|                                                      |  |                  |            | GMAC-RFC |            |  | International |         
|                                                      |  | GMAC Residential |            |          | Holding    |  |               | Business | 
|Nine months ended September 30, 2007                  |  | Holding          |            |          | (Domestic) |  |               | Group    | 
|                                                      |  |                  |            |          |            |  |               |          | 
|Range of prepayment speeds (constant prepayment rate) |  |                  | 12.6-41.6% |          |            |  | 13.6- 47.5    | %        |  |  | 0.4-11.1 | %
|Range of discount rates                               |  |                  | 7.5-13.9%  |          |            |  | 9.6-16.8      | %        |  |  | 8.0-12.5 | %

|                                                      |  |                  |            |          |            |  |               |          |  |  |         |  
|----------------------------------------------------- |  | ---------------- | ---------- | -------- | ---------- |  | ------------- | -------- |  |  | ------- | -
|                                                      |  |                  |            | GMAC-RFC |            |  | International |         
|                                                      |  | GMAC Residential |            |          | Holding    |  |               | Business | 
|Nine months ended September 30, 2006                  |  | Holding          |            |          | (Domestic) |  |               | Group    | 
|                                                      |  |                  |            |          |            |  |               |          | 
|Range of prepayment speeds (constant prepayment rate) |  |                  | 14.1-41.0% |          |            |  | 20.2- 25.6    | %        |  |  | 1.0-7.0 | %
|Range of discount rates                               |  |                  | 8.2-13.5%  |          |            |  | 12.2- 12.6    | %        |  |  | 8.0-8.0 | %



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






|                                                                                  |  |                   |           |  |      |   |           | 
|--------------------------------------------------------------------------------- |  | ----------------- | --------- |  | ---- | - | --------- | 
|                                                                                  |  | Nine Months Ended |          
|                                                                                  |  | September 30,     |          
|                                                                                  |  |                   |          
|                                                                                  |  | 2007              |           |  | 2006 |  
|                                                                                  |  |                   |           |  |      |  
|                                                                                  |  | (In thousands)    |          
|Contractual servicing fees (net of guarantee fees and including
    subservicing) |  | $                 | 1,154,784 |  |      | $ | 972,185   | 
|Late fees                                                                         |  |                   | 109,709   |  |      |   | 96,096    | 
|Ancillary fees                                                                    |  |                   | 86,248    |  |      |   | 93,982    | 
|                                                                                  |  |                   |           |  |      |  
|Total                                                                             |  | $                 | 1,350,741 |  |      | $ | 1,162,263 | 
|                                                                                  |  |                   |           |  |      |  

9.     Goodwill




|                                              |  |                |          |   |          |   |        |               |  |   |         |   |  |   |          |  
|--------------------------------------------- |  | -------------- | -------- | - | -------- | - | ------ | ------------- |  | - | ------- | - |  | - | -------- | -
|                                              |  | Residential    |          |   | Business |   |        | International |  |   |        
|                                              |  | Finance        |          |   | Capital  |   |        | Business      |  |   |        
|                                              |  | Group          |          |   | Group    |   |        | Group         |  |   | Total   |  
|                                              |  |                |          |   |          |   |        |               |  |   |         |  
|                                              |  | (In thousands) |         
|Balance at January 1, 2007                    |  | $              | 381,831  |   |          | $ | 10,748 |               |  | $ | 78,884  |   |  | $ | 471,463  |  
|Additions                                     |  |                | 22       |   |          |   |       |               |  |   |        |   |  |   | 22       |  
|Impairment losses                             |  |                | (381,853 | ) |          |   | (8,363 | )             |  |   | (64,612 | ) |  |   | (454,828 | )
|Foreign currency translation adjustments      |  |                |         |   |          |   |       |               |  |   | (14,272 | ) |  |   | (14,272  | )
|Disposal of healthcare business (See Note 13) |  |                |         |   |          |   | (2,385 | )             |  |   |        |   |  |   | (2,385   | )
|                                              |  |                |          |   |          |   |        |               |  |   |         |  
|Balance at September 30, 2007                 |  | $              |         |   |          | $ |       |               |  | $ |        |   |  | $ |         |  
|                                              |  |                |          |   |          |   |        |               |  |   |         |  



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|    |           
|--- | ----------
|10. | Borrowings



|                                                         |                                                   |                        |            |            |              |   |             |            |            | 
|-------------------------------------------------------- | ------------------------------------------------- | ---------------------- | ---------- | ---------- | ------------ | - | ----------- | ---------- | ---------- | 
|                                                         |                                                   | September 30,          |            |            | December 31, |  
|                                                         |                                                   | 2007                   |            |            | 2006         |  
|                                                         |                                                   |                        |            |            |              |  
|                                                         |                                                   | (In thousands)         |           
|Collateralized borrowings in securitization trusts(a)(b) |                                                   | $                      | 38,223,889 |            |              | $ | 53,299,518  |           
|Other borrowings:                                        |                                                   |                        |            |            |              |   |             |           
|                                                         | Secured aggregation facilities  short-term       |                        |            | 6,251,016  |              |   |             | 13,079,221 |           
|                                                         | Secured aggregation facilities  long-term(a)     |                        |            | 1,814,572  |              |   |             | 5,866,684  |           
|                                                         | Repurchase agreements  short-term                |                        |            | 6,667,893  |              |   |             | 10,961,850 |           
|                                                         | Repurchase agreements  long-term(a)              |                        |            | 167,941    |              |   |             | 543,675    |           
|                                                         | Senior unsecured notes(a)(c)                      |                        |            | 15,518,746 |              |   |             | 12,408,822 |           
|                                                         | Subordinated unsecured note(a)                    |                        |            | 1,000,000  |              |   |             | 1,000,000  |           
|                                                         | FHLB advances  long-term(a)                      |                        |            | 10,013,000 |              |   |             | 7,279,000  |           
|                                                         | Third-party bank credit facilities  short-term   |                        |            | 50,000     |              |   |             | 475,000    |           
|                                                         | Third-party bank credit facilities  long-term(a) |                        |            | 1,750,000  |              |   |             | 1,750,000  |           
|                                                         | Debt collateralized by mortgage loans             |                        |            | 1,992,052  |              |   |             | 3,017,961  |           
|                                                         | Servicing advances                                |                        |            | 734,800    |              |   |             | 728,750    |           
|                                                         | Investor custodial funds                          |                        |            |           |              |   |             | 131,709    |           
|                                                         | Other  short-term                                |                        |            | 2,846,214  |              |   |             | 1,820,111  |           
|                                                         | Other  long-term(a)                              |                        |            | 850,856    |              |   |             | 817,595    |           
|                                                         |                                                   |                        |            |            |              |  
|                                                         |                                                   | Total other borrowings |            |            | 49,657,090   |   |             |            | 59,880,378 | 
|                                                         |                                                   |                        |            |            |              |  
|Total borrowings                                         |                                                   | $                      | 87,880,979 |            |              | $ | 113,179,896 |           
|                                                         |                                                   |                        |            |            |              |  






|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Represents borrowings with an original contractual maturity in
    excess of one year.                                                                                                                                          
|(b) | See Note 5  Mortgage Loans Held for Investment.                                                                                                                                                                                
|(c) | During the quarter, the credit rating on our senior unsecured
    notes was downgraded by certain rating agencies resulting in an
    increase of 100 basis points to the Companys
    borrowing rates relating to these notes.

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|                                     |       |                |            |            |              |   |            |             | 
|------------------------------------ | ----- | -------------- | ---------- | ---------- | ------------ | - | ---------- | ----------- | 
|                                     |       | September 30,  |            |            | December 31, |  
|                                     |       | 2007           |            |            | 2006         |  
|                                     |       |                |            |            |              |  
|                                     |       | (In thousands) |           
|Mortgage loans held for investment   |       | $              | 57,745,481 |            |              | $ | 68,480,110 |            
|Mortgage loans held for sale         |       |                | 13,270,488 |            |              |   | 22,833,819 |            
|Trading securities                   |       |                | 2,510,742  |            |              |   | 3,639,702  |            
|Mortgage servicing rights            |       |                | 2,740,411  |            |              |   | 2,447,084  |            
|Lending receivables                  |       |                | 6,964,990  |            |              |   | 11,804,708 |            
|Accounts receivable                  |       |                | 1,069,190  |            |              |   | 951,722    |            
|Investments in real estate and other |       |                | 1,168,446  |            |              |   | 719,116    |            
|Other assets                         |       |                | 9,916,570  |            |              |   | 6,059,805  |            
|                                     |       |                |            |            |              |  
|                                     | Total |                | $          | 95,386,318 |              |   | $          | 116,936,066 | 
|                                     |       |                |            |            |              |  
|Related secured debt                 |       | $              | 67,803,786 |            |              | $ | 96,206,963 |            
|                                     |       |                |            |            |              |  





|                                     |       |                |           |           |              |   |           |            | 
|------------------------------------ | ----- | -------------- | --------- | --------- | ------------ | - | --------- | ---------- | 
|                                     |       | September 30,  |           |           | December 31, |  
|                                     |       | 2007           |           |           | 2006         |  
|                                     |       |                |           |           |              |  
|                                     |       | (In thousands) |          
|Mortgage loans held for sale         |       | $              | 3,825,764 |           |              | $ | 5,513,015 |           
|Mortgage loans held for investment   |       |                | 3,019,063 |           |              |   | 1,667,978 |           
|Trading securities                   |       |                | 1,520,632 |           |              |   | 2,945,653 |           
|Investments in real estate and other |       |                | 349,067   |           |              |   | 48,193    |           
|                                     |       |                |           |           |              |  
|                                     | Total |                | $         | 8,714,526 |              |   | $         | 10,174,839 | 
|                                     |       |                |           |           |              |  

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|    |                    
|--- | -------------------
|11. | Deposit Liabilities



|                                       |  |                |            |  |              |   |           | 
|-------------------------------------- |  | -------------- | ---------- |  | ------------ | - | --------- | 
|                                       |  | September 30,  |            |  | December 31, |  
|                                       |  | 2007           |            |  | 2006         |  
|                                       |  |                |            |  |              |  
|                                       |  | (In thousands) |           
|Non-interest bearing deposits          |  | $              | 2,767,252  |  |              | $ | 1,358,630 | 
|NOW and money market checking accounts |  |                | 3,621,684  |  |              |   | 1,806,156 | 
|Certificates of deposit                |  |                | 8,099,325  |  |              |   | 6,686,240 | 
|                                       |  |                |            |  |              |  
|Total                                  |  | $              | 14,488,261 |  |              | $ | 9,851,026 | 
|                                       |  |                |            |  |              |  





|    |                       
|--- | ----------------------
|12. | Derivative Instruments









|                                              |                                       |               |      |      |      |   |      |                                 |   |  |                               
|--------------------------------------------- | ------------------------------------- | ------------- | ---- | ---- | ---- | - | ---- | ------------------------------- | - |  | ------------------------------
|Nine Months Ended September 30,               |                                       | 2007          |      |      | 2006 |   |      | Income Statement Classification
|                                              |                                       |               |      |      |      |   |      |                                
|                                              |                                       | (In millions) |      |      |     
|Fair value hedge ineffectiveness gain (loss): |                                       |               |      |      |      |   |      |                                 |   | 
|                                              | Mortgage loans held for sale          |               | $    | (0.7 | )    |   | $    | (5.5                            | ) |  | Gain on sale of mortgage loans
|                                              | Senior unsecured notes                |               |      | (0.8 | )    |   |      | 0.3                             |   |  | Gain on investment securities 
|Cash flow hedge ineffectiveness gain:         |                                       |               |      |      |      |   |      |                                 |   | 
|                                              | Issuance of collateralized borrowings |               |      |     |      |   |      | 0.1                             |   |  | Interest expense              
|                                              |                                       |               |      |      |      |   |      |                                
|Total                                         |                                       | $             | (1.5 | )    |      | $ | (5.1 | )                               |   | 
|                                              |                                       |               |      |      |      |   |      |                                

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






|    |                           
|--- | --------------------------
|13. | Related Party Transactions



















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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)






|    |                 
|--- | ----------------
|14. | Subsequent Event







|    |                    
|--- | -------------------
|15. | Segment Information



|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|------------------------------------------------------------- |  | -------------- | ---------- | - | -------- | - | --------- | ------------- |  | - | ---------- | - |  | ------------ | ---------- | - | ------------ | - | ----------- | - |  | - | ----------- | -
|                                                              |  | Residential    |            |   | Business |   |           | International |  |   |            |   |  |              |           
|                                                              |  | Finance        |            |   | Capital  |   |           | Business      |  |   | Corporate  |   |  |              |            |  
|Three Months Ended September 30,                              |  | Group          |            |   | Group    |   |           | Group         |  |   | and Other  |   |  | Eliminations |            |   | Consolidated |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|                                                              |  | (In thousands) |           
|2007                                                          |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|Net interest income (expense)                                 |  | $              | 170,560    |   |          | $ | 22,702    |               |  | $ | 21,503     |   |  | $            | (9,505     | ) |              | $ |            |   |  | $ | 205,260     |  
|Provision for loan losses                                     |  |                | (765,759   | ) |          |   | (92,368   | )             |  |   | (22,445    | ) |  |              | (3,641     | ) |              |   |            |   |  |   | (884,213    | )
|Other revenue                                                 |  |                | (62,684    | ) |          |   | (78,185   | )             |  |   | (500,437   | ) |  |              | 137,359    |   |              |   |            |   |  |   | (503,947    | )
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total net revenue                                             |  |                | (657,883   | ) |          |   | (147,851  | )             |  |   | (501,379   | ) |  |              | 124,213    |   |              |   |            |   |  |   | (1,182,900  | )
|Operating expenses                                            |  |                | 896,985    |   |          |   | 24,888    |               |  |   | 158,363    |   |  |              | 92,672     |   |              |   |            |   |  |   | 1,172,908   |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before income tax expense and minority interest |  |                | (1,554,868 | ) |          |   | (172,739  | )             |  |   | (659,742   | ) |  |              | 31,541     |   |              |   |            |   |  |   | (2,355,808  | )
|Income tax expense (benefit)                                  |  |                | 21,215     |   |          |   | (849      | )             |  |   | (161,731   | ) |  |              | 21,923     |   |              |   |            |   |  |   | (119,442    | )
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before minority interest                        |  |                | (1,576,083 | ) |          |   | (171,890  | )             |  |   | (498,011   | ) |  |              | 9,618      |   |              |   |            |   |  |   | (2,236,366  | )
|Minority interest                                             |  |                |           |   |          |   |          |               |  |   |           |   |  |              | 24,561     |   |              |   |            |   |  |   | 24,561      |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net loss                                                      |  | $              | (1,576,083 | ) |          | $ | (171,890  | )             |  | $ | (498,011   | ) |  | $            | (14,943    | ) |              | $ |            |   |  | $ | (2,260,927  | )
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total assets                                                  |  | $              | 83,082,521 |   |          | $ | 6,490,298 |               |  | $ | 15,740,531 |   |  | $            | 30,882,999 |   |              | $ | (21,702,956 | ) |  | $ | 114,493,393 |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net interest income (expense) from other segments             |  | $              | (176,199   | ) |          | $ | (75,969   | )             |  | $ | 11,667     |   |  | $            | 240,501    |   |              | $ |            |   |  | $ |            |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  

21



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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)


|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|------------------------------------------------- |  | -------------- | ----------- | - | -------- | - | --------- | ------------- |  | - | ---------- | - |  | ------------ | ---------- | - | ------------ | - | ----------- | - |  | - | ----------- | -
|                                                  |  | Residential    |             |   | Business |   |           | International |  |   |            |   |  |              |           
|                                                  |  | Finance        |             |   | Capital  |   |           | Business      |  |   | Corporate  |   |  |              |            |  
|Three Months Ended September 30,                  |  | Group          |             |   | Group    |   |           | Group         |  |   | and Other  |   |  | Eliminations |            |   | Consolidated |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|                                                  |  | (In thousands) |            
|2006                                              |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|Net interest income                               |  | $              | 297,680     |   |          | $ | 23,741    |               |  | $ | 46,719     |   |  | $            | 13,812     |   |              | $ |            |   |  | $ | 381,952     |  
|Provision for loan losses                         |  |                | (214,530    | ) |          |   | (8,341    | )             |  |   | (15,867    | ) |  |              | 15         |   |              |   |            |   |  |   | (238,723    | )
|Other revenue                                     |  |                | 563,363     |   |          |   | 60,791    |               |  |   | 24,545     |   |  |              | 713        |   |              |   |            |   |  |   | 649,412     |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total net revenue                                 |  |                | 646,513     |   |          |   | 76,191    |               |  |   | 55,397     |   |  |              | 14,540     |   |              |   |            |   |  |   | 792,641     |  
|Operating expenses                                |  |                | 587,424     |   |          |   | 21,571    |               |  |   | 65,790     |   |  |              | (31,115    | ) |              |   |            |   |  |   | 643,670     |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before income tax expense           |  |                | 59,089      |   |          |   | 54,620    |               |  |   | (10,393    | ) |  |              | 45,655     |   |              |   |            |   |  |   | 148,971     |  
|Income tax expense (benefit)                      |  |                | 24,305      |   |          |   | 23,431    |               |  |   | (1,687     | ) |  |              | 19,489     |   |              |   |            |   |  |   | 65,538      |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net income (loss)                                 |  | $              | 34,784      |   |          | $ | 31,189    |               |  | $ | (8,706     | ) |  | $            | 26,166     |   |              | $ |            |   |  | $ | 83,433      |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total assets                                      |  | $              | 110,810,353 |   |          | $ | 7,192,330 |               |  | $ | 13,387,621 |   |  | $            | 22,465,716 |   |              | $ | (21,277,647 | ) |  | $ | 132,578,373 |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net interest income (expense) from other segments |  | $              | (142,762    | ) |          | $ | (73,293   | )             |  | $ | (19,016    | ) |  | $            | 235,071    |   |              | $ |            |   |  | $ |            |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  

|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|------------------------------------------------------------- |  | -------------- | ---------- | - | -------- | - | --------- | ------------- |  | - | ---------- | - |  | ------------ | ---------- | - | ------------ | - | ----------- | - |  | - | ----------- | -
|                                                              |  | Residential    |            |   | Business |   |           | International |  |   |            |   |  |              |           
|                                                              |  | Finance        |            |   | Capital  |   |           | Business      |  |   | Corporate  |   |  |              |            |  
|Nine Months Ended September 30,                               |  | Group          |            |   | Group    |   |           | Group         |  |   | and Other  |   |  | Eliminations |            |   | Consolidated |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|                                                              |  | (In thousands) |           
|2007                                                          |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|Net interest income (expense)                                 |  | $              | 756,030    |   |          | $ | 88,683    |               |  | $ | 81,179     |   |  | $            | (18,751    | ) |              | $ |            |   |  | $ | 907,141     |  
|Provision for loan losses                                     |  |                | (1,554,385 | ) |          |   | (149,810  | )             |  |   | (45,006    | ) |  |              | (10,439    | ) |              |   |            |   |  |   | (1,759,640  | )
|Other revenue                                                 |  |                | 261,983    |   |          |   | 9,093     |               |  |   | (257,985   | ) |  |              | 374,304    |   |              |   |             |   |  |   | 387,395     |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total net revenue                                             |  |                | (536,372   | ) |          |   | (52,034   | )             |  |   | (221,812   | ) |  |              | 345,114    |   |              |   |            |   |  |   | (465,104    | )
|Operating expenses                                            |  |                | 2,205,111  |   |          |   | 62,494    |               |  |   | 347,849    |   |  |              | 260,603    |   |              |   |            |   |  |   | 2,876,057   |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before income tax expense and minority interest |  |                | (2,741,483 | ) |          |   | (114,528  | )             |  |   | (569,661   | ) |  |              | 84,511     |   |              |   |            |   |  |   | (3,341,161  | )
|Income tax expense (benefit)                                  |  |                | 94,279     |   |          |   | (531      | )             |  |   | (131,435   | ) |  |              | 53,874     |   |              |   |            |   |  |   | 16,187      |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before minority interest                        |  |                | (2,835,762 | ) |          |   | (113,997  | )             |  |   | (438,226   | ) |  |              | 30,637     |   |              |   |             |   |  |   | (3,357,348  | )
|Minority interest                                             |  |                |           |   |          |   |          |               |  |   |           |   |  |              | 68,051     |   |              |   |            |   |  |   | 68,051      |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net loss                                                      |  | $              | (2,835,762 | ) |          | $ | (113,997  | )             |  | $ | (438,226   | ) |  | $            | (37,414    | ) |              | $ |            |   |  | $ | (3,425,399  | )
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total assets                                                  |  | $              | 83,082,521 |   |          | $ | 6,490,298 |               |  | $ | 15,740,531 |   |  | $            | 30,882,999 |   |              | $ | (21,702,956 | ) |  | $ | 114,493,393 |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net interest income (expense) from other segments             |  | $              | (468,372   | ) |          | $ | (222,725  | )             |  | $ | (94,243    | ) |  | $            | 785,340    |   |              | $ |            |   |  | $ |            |  
|                                                              |  |                |            |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  

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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)


|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|------------------------------------------------- |  | -------------- | ----------- | - | -------- | - | --------- | ------------- |  | - | ---------- | - |  | ------------ | ---------- | - | ------------ | - | ----------- | - |  | - | ----------- | -
|                                                  |  | Residential    |             |   | Business |   |           | International |  |   |            |   |  |              |           
|                                                  |  | Finance        |             |   | Capital  |   |           | Business      |  |   | Corporate  |   |  |              |            |  
|Nine Months Ended September 30,                   |  | Group          |             |   | Group    |   |           | Group         |  |   | and Other  |   |  | Eliminations |            |   | Consolidated |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|                                                  |  | (In thousands) |            
|2006                                              |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |   |             |   |  |   |             |  
|Net interest income                               |  | $              | 1,034,900   |   |          | $ | 66,954    |               |  | $ | 130,573    |   |  | $            | 29,549     |   |              | $ |            |   |  | $ | 1,261,976   |  
|Provision for loan losses                         |  |                | (448,484    | ) |          |   | (13,137   | )             |  |   | (22,493    | ) |  |              | 54         |   |              |   |            |   |  |   | (484,060    | )
|Other revenue                                     |  |                | 1,728,816   |   |          |   | 632,998   |               |  |   | 169,681    |   |  |              | (1,062     | ) |              |   |            |   |  |   | 2,530,433   |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total net revenue                                 |  |                | 2,315,232   |   |          |   | 686,815   |               |  |   | 277,761    |   |  |              | 28,541     |   |              |   |            |   |  |   | 3,308,349   |  
|Operating expenses                                |  |                | 1,727,772   |   |          |   | 57,667    |               |  |   | 183,994    |   |  |              | (28,288    | ) |              |   |            |   |  |   | 1,941,145   |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Income (loss) before income tax expense           |  |                | 587,460     |   |          |   | 629,148   |               |  |   | 93,767     |   |  |              | 56,829     |   |              |   |            |   |  |   | 1,367,204   |  
|Income tax expense (benefit)                      |  |                | 250,079     |   |          |   | 244,739   |               |  |   | 20,949     |   |  |              | 18,362     |   |              |   |            |   |  |   | 534,129     |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net income (loss)                                 |  | $              | 337,381     |   |          | $ | 384,409   |               |  | $ | 72,818     |   |  | $            | 38,467     |   |              | $ |            |   |  | $ | 833,075     |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Total assets                                      |  | $              | 110,810,353 |   |          | $ | 7,192,330 |               |  | $ | 13,387,621 |   |  | $            | 22,465,716 |   |              | $ | (21,277,647 | ) |  | $ | 132,578,373 |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  
|Net interest income (expense) from other segments |  | $              | (404,385    | ) |          | $ | (201,238  | )             |  | $ | (26,956    | ) |  | $            | 632,579    |   |              | $ |            |   |  | $ |            |  
|                                                  |  |                |             |   |          |   |           |               |  |   |            |   |  |              |            |   |              |  



|    |                   
|--- | ------------------
|16. | Regulatory Matters









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RESIDENTIAL CAPITAL, LLC


NOTES TO CONDENSED


CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)  (Continued)




|                                                            |  |             |         |               |                  |  |       |        |  |   |         |  |  |  |       | 
|----------------------------------------------------------- |  | ----------- | ------- | ------------- | ---------------- |  | ----- | ------ |  | - | ------- |  |  |  | ----- | 
|                                                            |  |             |         | Minimum to be |                 
|                                                            |  | Actual      |         |               | Well Capitalized | 
|                                                            |  |             |         |               |                  | 
|September 30, 2007                                          |  | Amount      |         |               | Ratio            |  |       | Amount |  |   | Ratio   | 
|                                                            |  |             |         |               |                  |  |       |        |  |   |         | 
|                                                            |  | (Dollars in |         |               | (Dollars in      | 
|                                                            |  | thousands)  |         |               | thousands)       | 
|Total capital (Tier 1 + Tier 2) to risk
    weighted assets |  | $           | 3,190.0 |               |                  |  | 16.9% |        |  | $ | 1,891.8 |  |  |  | 10.0% | 
|Tier 1 capital to risk weighted assets                      |  |             | 3,104.7 |               |                  |  | 16.4% |        |  |   | 1,135.1 |  |  |  | 6.0%  | 
|Tier 1 capital to average assets (leveraged ratio)          |  |             | 3,104.7 |               |                  |  | 12.5% |        |  |   | 1,245.4 |  |  |  | 5.0%  | 





|    |                                   
|--- | ----------------------------------
|17. | Supplemental Financial Information





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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING BALANCE SHEET


September 30, 2007


|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |            |            | 
|----------------------------------------------- | -------------------------------------------------- | ---------------- | ---------- | ---------- | ------------ | - | ------------- | ------------ | ---------- | - | ------------ | ---------- | ---------- | ------------ | ----------- | ----------- | ----------- | - | ----------- | ---------- | ---------- | 
|                                                |                                                    |                  |            | Guarantor  |              |   | Non-Guarantor |              |            |   |              |           
|                                                |                                                    | Parent           |            |            | Subsidiaries |   |               | Subsidiaries |            |   | Eliminations |            |            | Consolidated |            
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                                |                                                    | (In thousands)   |           
|ASSETS                                         
|Cash and cash equivalents                       |                                                    | $                | 3,332,614  |            |              | $ | 100,728       |              |            | $ | 3,121,823    |            |            | $            | (35,677     | )           |             | $ | 6,519,488   |           
|Mortgage loans held for sale                    |                                                    |                  |           |            |              |   | 2,907,559     |              |            |   | 12,076,454   |            |            |              | (4,314      | )           |             |   | 14,979,699  |           
|Trading securities                              |                                                    |                  |           |            |              |   | 1,933,310     |              |            |   | 1,721,196    |            |            |              |            |             |             |   | 3,654,506   |           
|Mortgage loans held for investment, net         |                                                    |                  |           |            |              |   | 5,425,303     |              |            |   | 53,660,193   |            |            |              | (47,724     | )           |             |   | 59,037,772  |           
|Lending receivables, net                        |                                                    |                  |           |            |              |   | 730,128       |              |            |   | 7,705,883    |            |            |              | 506         |             |             |   | 8,436,517   |           
|Mortgage servicing rights                       |                                                    |                  |           |            |              |   | 5,529,965     |              |            |   | 17,069       |            |            |              |            |             |             |   | 5,547,034   |           
|Accounts receivable                             |                                                    |                  | 10,433     |            |              |   | 1,550,472     |              |            |   | 1,487,562    |            |            |              | (465,962    | )           |             |   | 2,582,505   |           
|Investments in real estate and other            |                                                    |                  |           |            |              |   | 92,852        |              |            |   | 1,976,324    |            |            |              |            |             |             |   | 2,069,176   |           
|Goodwill                                        |                                                    |                  |           |            |              |   |              |              |            |   |             |            |            |              |            |             |             |   |            |           
|Other assets                                    |                                                    |                  | 430,913    |            |              |   | 7,086,959     |              |            |   | 9,596,134    |            |            |              | (5,447,310  | )           |             |   | 11,666,696  |           
|Investment in and loans to subsidiaries         |                                                    |                  | 21,108,701 |            |              |   | 881,914       |              |            |   |             |            |            |              | (21,990,615 | )           |             |   |            |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total assets                                    |                                                    | $                | 24,882,661 |            |              | $ | 26,239,190    |              |            | $ | 91,362,638   |            |            | $            | (27,991,096 | )           |             | $ | 114,493,393 |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                               
|LIABILITIES                                    
|Borrowings:                                     |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |             |             |             |   |             |           
|                                                | Affiliate borrowings                               |                  | $          |           |              |   | $             | 10,603,593   |            |   | $            | 3,107,553  |            |              | $           | (13,711,146 | )           |   | $           |           |           
|                                                | Collateralized borrowings in securitization trusts |                  |            |           |              |   |               |             |            |   |              | 38,223,889 |            |              |             |            |             |   |             | 38,223,889 |           
|                                                | Other borrowings                                   |                  |            | 18,268,746 |              |   |               | 7,138,425    |            |   |              | 24,715,375 |            |              |             | (465,456    | )           |   |             | 49,657,090 |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|                                                |                                                    | Total borrowings |            |            | 18,268,746   |   |               |              | 17,742,018 |   |              |            | 66,046,817 |              |             |             | (14,176,602 | ) |             |            | 87,880,979 | 
|Deposit liabilities                             |                                                    |                  |           |            |              |   |              |              |            |   | 14,523,938   |            |            |              | (35,677     | )           |             |   | 14,488,261  |           
|Other liabilities                               |                                                    |                  | 442,360    |            |              |   | 3,035,859     |              |            |   | 6,779,609    |            |            |              | (5,464,106  | )           |             |   | 4,793,722   |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities                               |                                                    |                  | 18,711,106 |            |              |   | 20,777,877    |              |            |   | 87,350,364   |            |            |              | (19,676,385 | )           |             |   | 107,162,962 |           
|Minority interest                               |                                                    |                  |           |            |              |   |              |              |            |   | 1,158,876    |            |            |              |            |             |             |   | 1,158,876   |           
|                                               
|EQUITY                                         
|Common stock and paid-in capital                |                                                    |                  |           |            |              |   |              |              |            |   | 175,783      |            |            |              | (175,783    | )           |             |   |            |           
|Members interest                               |                                                    |                  | 5,861,684  |            |              |   | 5,925,779     |              |            |   | 2,677,169    |            |            |              | (8,602,948  | )           |             |   | 5,861,684   |           
|Retained earnings                               |                                                    |                  | 226,183    |            |              |   | (548,398      | )            |            |   | (81,189      | )          |            |              | 629,587     |             |             |   | 226,183     |           
|Accumulated other comprehensive income          |                                                    |                  | 83,688     |            |              |   | 83,932        |              |            |   | 81,635       |            |            |              | (165,567    | )           |             |   | 83,688      |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total equity                                    |                                                    |                  | 6,171,555  |            |              |   | 5,461,313     |              |            |   | 2,853,398    |            |            |              | (8,314,711  | )           |             |   | 6,171,555   |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            
|Total liabilities, minority interest and equity |                                                    | $                | 24,882,661 |            |              | $ | 26,239,190    |              |            | $ | 91,362,638   |            |            | $            | (27,991,096 | )           |             | $ | 114,493,393 |           
|                                                |                                                    |                  |            |            |              |   |               |              |            |   |              |            |            |              |            

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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Three Months Ended September 30, 2007


|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------ |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | --------- | - |  | - | ---------- | -
|                                                                                                                   |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                                                   |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |          
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|                                                                                                                   |  | (In thousands) |           
|Revenue                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|Interest income                                                                                                    |  | $              | 343,265    |           |              | $ | 329,076       |              |  | $ | 1,535,783    |   |  | $            | (322,118  | ) |  | $ | 1,886,006  |  
|Interest expense                                                                                                   |  |                | 339,027    |           |              |   | 318,775       |              |  |   | 1,349,928    |   |  |              | (326,984  | ) |  |   | 1,680,746  |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net interest income                                                                                                |  |                | 4,238      |           |              |   | 10,301        |              |  |   | 185,855      |   |  |              | 4,866     |   |  |   | 205,260    |  
|Provision for loan losses                                                                                          |  |                |           |           |              |   | 263,055       |              |  |   | 622,100      |   |  |              | (942      | ) |  |   | 884,213    |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net interest income (loss) after provision for loan losses                                                         |  |                | 4,238      |           |              |   | (252,754      | )            |  |   | (436,245     | ) |  |              | 5,808     |   |  |   | (678,953   | )
|Loss on sale of mortgage loans, net                                                                                |  |                |           |           |              |   | (236,645      | )            |  |   | (332,180     | ) |  |              | (764      | ) |  |   | (569,589   | )
|Servicing fees                                                                                                     |  |                |           |           |              |   | 438,935       |              |  |   | 12,698       |   |  |              | (213      | ) |  |   | 451,420    |  
|Servicing asset valuation and hedge activities, net                                                                |  |                |           |           |              |   | (121,294      | )            |  |   | (2,145       | ) |  |              |          |   |  |   | (123,439   | )
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net servicing fees                                                                                                 |  |                |           |           |              |   | 317,641       |              |  |   | 10,553       |   |  |              | (213      | ) |  |   | 327,981    |  
|Loss on investment securities, net                                                                                 |  |                |           |           |              |   | (52,870       | )            |  |   | (279,641     | ) |  |              |          |   |  |   | (332,511   | )
|Real estate related revenues                                                                                       |  |                |           |           |              |   | (13,344       | )            |  |   | 36,849       |   |  |              |          |   |  |   | 23,505     |  
|Other income                                                                                                       |  |                | 1,159      |           |              |   | (54,157       | )            |  |   | 116,057      |   |  |              | (16,392   | ) |  |   | 46,667     |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Total net revenue                                                                                                  |  |                | 5,397      |           |              |   | (292,129      | )            |  |   | (884,607     | ) |  |              | (11,561   | ) |  |   | (1,182,900 | )
|Expenses                                                                                                           |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|Compensation and benefits                                                                                          |  |                |           |           |              |   | 155,069       |              |  |   | 150,965      |   |  |              |          |   |  |   | 306,034    |  
|Professional fees                                                                                                  |  |                |           |           |              |   | 39,019        |              |  |   | 18,100       |   |  |              |          |   |  |   | 57,119     |  
|Data processing and telecommunications                                                                             |  |                |           |           |              |   | 48,862        |              |  |   | 15,264       |   |  |              |          |   |  |   | 64,126     |  
|Advertising                                                                                                        |  |                |           |           |              |   | 21,096        |              |  |   | 8,604        |   |  |              |          |   |  |   | 29,700     |  
|Occupancy                                                                                                          |  |                |           |           |              |   | 20,620        |              |  |   | 13,725       |   |  |              |          |   |  |   | 34,345     |  
|Goodwill impairment                                                                                                |  |                |           |           |              |   | 215,378       |              |  |   | 239,450      |   |  |              |          |   |  |   | 454,828    |  
|Other                                                                                                              |  |                | 2,724      |           |              |   | 60,549        |              |  |   | 173,153      |   |  |              | (9,670    | ) |  |   | 226,756    |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Total expenses                                                                                                     |  |                | 2,724      |           |              |   | 560,593       |              |  |   | 619,261      |   |  |              | (9,670    | ) |  |   | 1,172,908  |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Income (loss) before income tax expense, minority interest and
    equity in net earnings (losses) of subsidiaries |  |                | 2,673      |           |              |   | (852,722      | )            |  |   | (1,503,868   | ) |  |              | (1,891    | ) |  |   | (2,355,808 | )
|Income tax benefit                                                                                                 |  |                |           |           |              |   | (995          | )            |  |   | (118,445     | ) |  |              | (2        | ) |  |   | (119,442   | )
|Income (loss) before minority interest and equity in net
    earnings (losses) of subsidiaries                     |  |                | 2,673      |           |              |   | (851,727      | )            |  |   | (1,385,423   | ) |  |              | (1,889    | ) |  |   | (2,236,366 | )
|Minority interest                                                                                                  |  |                |           |           |              |   |              |              |  |   | 24,561       |   |  |              |          |   |  |   | 24,561     |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Income (loss) before equity in net earnings (losses) of
    subsidiaries                                           |  |                | 2,673      |           |              |   | (851,727      | )            |  |   | (1,409,984   | ) |  |              | (1,889    | ) |  |   | (2,260,927 | )
|Equity in net losses of subsidiaries                                                                               |  |                | (2,263,600 | )         |              |   | (1,451,826    | )            |  |   |             |   |  |              | 3,715,426 |   |  |   |           |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net loss                                                                                                           |  | $              | (2,260,927 | )         |              | $ | (2,303,553    | )            |  | $ | (1,409,984   | ) |  | $            | 3,713,537 |   |  | $ | (2,260,927 | )
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          

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##### Table of Contents



RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Three Months Ended September 30, 2006


|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |           |  
|-------------------------------------------------------------------------------------- |  | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | -------- | - |  | - | --------- | -
|                                                                                       |  |                |         | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                       |  | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |         
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|                                                                                       |  | (In thousands) |        
|Revenue                                                                                |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |           |  
|Interest income                                                                        |  | $              | 243,170 |           |              | $ | 323,077       |              |  | $ | 1,747,563    |   |  | $            | (228,252 | ) |  | $ | 2,085,558 |  
|Interest expense                                                                       |  |                | 243,477 |           |              |   | 272,963       |              |  |   | 1,426,441    |   |  |              | (239,275 | ) |  |   | 1,703,606 |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net interest income (expense)                                                          |  |                | (307    | )         |              |   | 50,114        |              |  |   | 321,122      |   |  |              | 11,023   |   |  |   | 381,952   |  
|Provision for loan losses                                                              |  |                |        |           |              |   | 34,985        |              |  |   | 204,482      |   |  |              | (744     | ) |  |   | 238,723   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net interest income (expense) after provision for loan losses                          |  |                | (307    | )         |              |   | 15,129        |              |  |   | 116,640      |   |  |              | 11,767   |   |  |   | 143,229   |  
|Gain (loss) on sale of mortgage loans, net                                             |  |                |        |           |              |   | 264,924       |              |  |   | (37,964      | ) |  |              | 9,795    |   |  |   | 236,755   |  
|Servicing fees                                                                         |  |                |        |           |              |   | 405,958       |              |  |   | (1,842       | ) |  |              | (3,021   | ) |  |   | 401,095   |  
|Servicing asset valuation and hedge activities, net                                    |  |                |        |           |              |   | (330,321      | )            |  |   | (1,017       | ) |  |              |         |   |  |   | (331,338  | )
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net servicing fees                                                                     |  |                |        |           |              |   | 75,637        |              |  |   | (2,859       | ) |  |              | (3,021   | ) |  |   | 69,757    |  
|Gain on investment securities, net                                                     |  |                |        |           |              |   | 88,835        |              |  |   | 52,894       |   |  |              |         |   |  |   | 141,729   |  
|Real estate related revenues                                                           |  |                |        |           |              |   | 2,166         |              |  |   | 160,062      |   |  |              |         |   |  |   | 162,228   |  
|Other income                                                                           |  |                | 712     |           |              |   | 69,705        |              |  |   | (6,303       | ) |  |              | (25,171  | ) |  |   | 38,943    |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Total net revenue                                                                      |  |                | 405     |           |              |   | 516,396       |              |  |   | 282,470      |   |  |              | (6,630   | ) |  |   | 792,641   |  
|                                                                                      
|Expenses                                                                               |  |                |         |           |              |   |               |              |  |   |              |   |  |              |          |   |  |   |           |  
|Compensation and benefits                                                              |  |                |        |           |              |   | 164,426       |              |  |   | 134,523      |   |  |              |         |   |  |   | 298,949   |  
|Professional fees                                                                      |  |                |        |           |              |   | 73,651        |              |  |   | 1,190        |   |  |              | (89      | ) |  |   | 74,752    |  
|Data processing and telecommunications                                                 |  |                |        |           |              |   | 33,931        |              |  |   | 14,209       |   |  |              |         |   |  |   | 48,140    |  
|Advertising                                                                            |  |                |        |           |              |   | 27,001        |              |  |   | 7,395        |   |  |              |         |   |  |   | 34,396    |  
|Occupancy                                                                              |  |                |        |           |              |   | 21,428        |              |  |   | 12,534       |   |  |              |         |   |  |   | 33,962    |  
|Other                                                                                  |  |                | 998     |           |              |   | 98,750        |              |  |   | 79,999       |   |  |              | (26,276  | ) |  |   | 153,471   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Total expenses                                                                         |  |                | 998     |           |              |   | 419,187       |              |  |   | 249,850      |   |  |              | (26,365  | ) |  |   | 643,670   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Income (loss) before income tax expense and equity in net
    earnings of subsidiaries |  |                | (593    | )         |              |   | 97,209        |              |  |   | 32,620       |   |  |              | 19,735   |   |  |   | 148,971   |  
|Income tax expense (benefit)                                                           |  |                | (227    | )         |              |   | 43,238        |              |  |   | 13,544       |   |  |              | 8,983    |   |  |   | 65,538    |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Income (loss) before equity in net earnings of subsidiaries                            |  |                | (366    | )         |              |   | 53,971        |              |  |   | 19,076       |   |  |              | 10,752   |   |  |   | 83,433    |  
|Equity in net earnings of subsidiaries                                                 |  |                | 83,799  |           |              |   | 29,828        |              |  |   |             |   |  |              | (113,627 | ) |  |   |          |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         
|Net income                                                                             |  | $              | 83,433  |           |              | $ | 83,799        |              |  | $ | 19,076       |   |  | $            | (102,875 | ) |  | $ | 83,433    |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |         

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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Nine Months Ended September 30, 2007


|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------ |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | --------- | - |  | - | ---------- | -
|                                                                                                                   |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                                                   |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |          
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|                                                                                                                   |  | (In thousands) |           
|Revenue                                                                                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|Interest income                                                                                                    |  | $              | 891,276    |           |              | $ | 1,139,101     |              |  | $ | 4,806,027    |   |  | $            | (846,956  | ) |  | $ | 5,989,448  |  
|Interest expense                                                                                                   |  |                | 884,012    |           |              |   | 950,927       |              |  |   | 4,113,392    |   |  |              | (866,024  | ) |  |   | 5,082,307  |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net interest income                                                                                                |  |                | 7,264      |           |              |   | 188,174       |              |  |   | 692,635      |   |  |              | 19,068    |   |  |   | 907,141    |  
|Provision for loan losses                                                                                          |  |                |           |           |              |   | 559,322       |              |  |   | 1,203,422    |   |  |              | (3,104    | ) |  |   | 1,759,640  |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net interest income (loss) after provision for loan losses                                                         |  |                | 7,264      |           |              |   | (371,148      | )            |  |   | (510,787     | ) |  |              | 22,172    |   |  |   | (852,499   | )
|Gain (loss) on sale of mortgage loans, net                                                                         |  |                |           |           |              |   | (528,057      | )            |  |   | (99,165      | ) |  |              | (3,490    | ) |  |   | (630,712   | )
|Servicing fees                                                                                                     |  |                |           |           |              |   | 1,319,606     |              |  |   | 34,983       |   |  |              | (3,848    | ) |  |   | 1,350,741  |  
|Servicing asset valuation and hedge activities, net                                                                |  |                |           |           |              |   | (573,969      | )            |  |   | (3,357       | ) |  |              |          |   |  |   | (577,326   | )
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net servicing fees                                                                                                 |  |                |           |           |              |   | 745,637       |              |  |   | 31,626       |   |  |              | (3,848    | ) |  |   | 773,415    |  
|Gain (loss) on investment securities, net                                                                          |  |                | (771       | )         |              |   | (144,153      | )            |  |   | (204,127     | ) |  |              |          |   |  |   | (349,051   | )
|Real estate related revenues                                                                                       |  |                |           |           |              |   | (210          | )            |  |   | 292,603      |   |  |              |          |   |  |   | 292,393    |  
|Loss on sale of equity investments                                                                                 |  |                |           |           |              |   |              |              |  |   | (542         | ) |  |              |          |   |  |   | (542       | )
|Other income                                                                                                       |  |                | 2,981      |           |              |   | 12,620        |              |  |   | 364,691      |   |  |              | (78,400   | ) |  |   | 301,892    |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Total net revenue                                                                                                  |  |                | 9,474      |           |              |   | (285,311      | )            |  |   | (125,701     | ) |  |              | (63,566   | ) |  |   | (465,104   | )
|Expenses                                                                                                           |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           |   |  |   |            |  
|Compensation and benefits                                                                                          |  |                |           |           |              |   | 569,168       |              |  |   | 421,657      |   |  |              |          |   |  |   | 990,825    |  
|Professional fees                                                                                                  |  |                |           |           |              |   | 126,399       |              |  |   | 46,222       |   |  |              |          |   |  |   | 172,621    |  
|Data processing and telecommunications                                                                             |  |                |           |           |              |   | 111,721       |              |  |   | 45,771       |   |  |              |          |   |  |   | 157,492    |  
|Advertising                                                                                                        |  |                |           |           |              |   | 66,074        |              |  |   | 29,143       |   |  |              |          |   |  |   | 95,217     |  
|Occupancy                                                                                                          |  |                |           |           |              |   | 67,177        |              |  |   | 41,143       |   |  |              |          |   |  |   | 108,320    |  
|Goodwill impairment                                                                                                |  |                |           |           |              |   | 215,378       |              |  |   | 239,450      |   |  |              |          |   |  |   | 454,828    |  
|Other                                                                                                              |  |                | 2,565      |           |              |   | 451,860       |              |  |   | 519,333      |   |  |              | (77,004   | ) |  |   | 896,754    |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Total expenses                                                                                                     |  |                | 2,565      |           |              |   | 1,607,777     |              |  |   | 1,342,719    |   |  |              | (77,004   | ) |  |   | 2,876,057  |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Income (loss) before income tax expense, minority interest and
    equity in net earnings (losses) of subsidiaries |  |                | 6,909      |           |              |   | (1,893,088    | )            |  |   | (1,468,420   | ) |  |              | 13,438    |   |  |   | (3,341,161 | )
|Income tax expense (benefit)                                                                                       |  |                |           |           |              |   | (5,790        | )            |  |   | 21,876       |   |  |              | 101       |   |  |   | 16,187     |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Income (loss) before minority interest and equity in net
    earnings (losses) of subsidiaries                     |  |                | 6,909      |           |              |   | (1,887,298    | )            |  |   | (1,490,296   | ) |  |              | 13,337    |   |  |   | (3,357,348 | )
|Minority interest                                                                                                  |  |                |           |           |              |   |              |              |  |   | 68,051       |   |  |              |          |   |  |   | 68,051     |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Income (loss) before equity in net earnings (losses) of
    subsidiaries                                           |  |                | 6,909      |           |              |   | (1,887,298    | )            |  |   | (1,558,347   | ) |  |              | 13,337    |   |  |   | (3,425,399 | )
|Equity in net losses of subsidiaries                                                                               |  |                | (3,432,308 | )         |              |   | (1,701,735    | )            |  |   |             |   |  |              | 5,134,043 |   |  |   |           |  
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          
|Net loss                                                                                                           |  | $              | (3,425,399 | )         |              | $ | (3,589,033    | )            |  | $ | (1,558,347   | ) |  | $            | 5,147,380 |   |  | $ | (3,425,399 | )
|                                                                                                                   |  |                |            |           |              |   |               |              |  |   |              |   |  |              |          

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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF INCOME


Nine Months Ended September 30, 2006


|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|-------------------------------------------------------------------------------------- |  | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | --------- | -
|                                                                                       |  |                |         | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                       |  | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|                                                                                       |  | (In thousands) |        
|Revenue                                                                                |  |                |         |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|Interest income                                                                        |  | $              | 668,009 |           |              | $ | 1,063,571     |              |  | $ | 4,844,036    |   |  | $            | (616,771   | ) |  | $ | 5,958,845 |  
|Interest expense                                                                       |  |                | 666,393 |           |              |   | 801,280       |              |  |   | 3,881,421    |   |  |              | (652,225   | ) |  |   | 4,696,869 |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Net interest income                                                                    |  |                | 1,616   |           |              |   | 262,291       |              |  |   | 962,615      |   |  |              | 35,454     |   |  |   | 1,261,976 |  
|Provision for loan losses                                                              |  |                |        |           |              |   | 63,232        |              |  |   | 422,440      |   |  |              | (1,612     | ) |  |   | 484,060   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Net interest income after provision for loan losses                                    |  |                | 1,616   |           |              |   | 199,059       |              |  |   | 540,175      |   |  |              | 37,066     |   |  |   | 777,916   |  
|Gain on sale of mortgage loans, net                                                    |  |                |        |           |              |   | 728,176       |              |  |   | 156,953      |   |  |              | (6,341     | ) |  |   | 878,788   |  
|Servicing fees                                                                         |  |                |        |           |              |   | 1,174,324     |              |  |   | (6,474       | ) |  |              | (5,587     | ) |  |   | 1,162,263 |  
|Servicing asset valuation and hedge activities, net                                    |  |                |        |           |              |   | (686,684      | )            |  |   | (927         | ) |  |              |           |   |  |   | (687,611  | )
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Net servicing fees                                                                     |  |                |        |           |              |   | 487,640       |              |  |   | (7,401       | ) |  |              | (5,587     | ) |  |   | 474,652   |  
|Gain (loss) on investment securities, net                                              |  |                | 286     |           |              |   | (4,404        | )            |  |   | 128,886      |   |  |              |           |   |  |   | 124,768   |  
|Real estate related revenues                                                           |  |                |        |           |              |   | 50,974        |              |  |   | 442,484      |   |  |              |           |   |  |   | 493,458   |  
|Gain on sale of equity investments                                                     |  |                |        |           |              |   | 414,508       |              |  |   |             |   |  |              |           |   |  |   | 414,508   |  
|Other income                                                                           |  |                | 1,307   |           |              |   | 138,365       |              |  |   | 74,384       |   |  |              | (69,797    | ) |  |   | 144,259   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Total net revenue                                                                      |  |                | 3,209   |           |              |   | 2,014,318     |              |  |   | 1,335,481    |   |  |              | (44,659    | ) |  |   | 3,308,349 |  
|Expenses                                                                               |  |                |         |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |           |  
|Compensation and benefits                                                              |  |                |        |           |              |   | 598,655       |              |  |   | 382,755      |   |  |              |           |   |  |   | 981,410   |  
|Professional fees                                                                      |  |                |        |           |              |   | 169,899       |              |  |   | 23,664       |   |  |              |           |   |  |   | 193,563   |  
|Data processing and telecommunications                                                 |  |                |        |           |              |   | 101,209       |              |  |   | 39,421       |   |  |              |           |   |  |   | 140,630   |  
|Advertising                                                                            |  |                |        |           |              |   | 93,396        |              |  |   | 26,152       |   |  |              |           |   |  |   | 119,548   |  
|Occupancy                                                                              |  |                |        |           |              |   | 63,163        |              |  |   | 37,478       |   |  |              |           |   |  |   | 100,641   |  
|Other                                                                                  |  |                | 3,089   |           |              |   | 263,774       |              |  |   | 209,503      |   |  |              | (71,013    | ) |  |   | 405,353   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Total expenses                                                                         |  |                | 3,089   |           |              |   | 1,290,096     |              |  |   | 718,973      |   |  |              | (71,013    | ) |  |   | 1,941,145 |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Income (loss) before income tax expense and equity in net
    earnings of subsidiaries |  |                | 120     |           |              |   | 724,222       |              |  |   | 616,508      |   |  |              | 26,354     |   |  |   | 1,367,204 |  
|Income tax expense (benefit)                                                           |  |                | 46      |           |              |   | 319,013       |              |  |   | 205,555      |   |  |              | 9,515      |   |  |   | 534,129   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Income before equity in net earnings of subsidiaries                                   |  |                | 74      |           |              |   | 405,209       |              |  |   | 410,953      |   |  |              | 16,839     |   |  |   | 833,075   |  
|Equity in net earnings of subsidiaries                                                 |  |                | 833,001 |           |              |   | 427,792       |              |  |   |             |   |  |              | (1,260,793 | ) |  |   |          |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           
|Net income                                                                             |  | $              | 833,075 |           |              | $ | 833,001       |              |  | $ | 410,953      |   |  | $            | (1,243,954 | ) |  | $ | 833,075   |  
|                                                                                       |  |                |         |           |              |   |               |              |  |   |              |   |  |              |           

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##### Table of Contents



RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


Nine Months Ended September 30, 2007


|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | ----------- | -
|                                                                                 |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                 |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|                                                                                 |  | (In thousands) |           
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                              |  | $              | (1,261     | )         |              | $ | (3,359,247    | )            |  | $ | 5,259,024    |   |  | $            | 2,393      |   |  | $ | 1,900,909   |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net decrease in lending receivables                                              |  |                |           |           |              |   | 1,877,740     |              |  |   | 3,305,497    |   |  |              |           |   |  |   | 5,183,237   |  
|Originations and purchases of mortgage loans held for investment                 |  |                |           |           |              |   | (2,264,823    | )            |  |   | (4,439,946   | ) |  |              | (28,519    | ) |  |   | (6,733,288  | )
|Proceeds from sales and repayments of mortgage loans held for
    investment     |  |                |           |           |              |   | 794,022       |              |  |   | 13,343,211   |   |  |              | (639       | ) |  |   | 14,136,594  |  
|Additions to mortgage servicing rights, net                                      |  |                |           |           |              |   | (9,291        | )            |  |   | (3,192       | ) |  |              | 9,291      |   |  |   | (3,192      | )
|Sale of mortgage servicing rights, net                                           |  |                |           |           |              |   | 165,557       |              |  |   |             |   |  |              |           |   |  |   | 165,557     |  
|Purchases of and advances to investments in real estate and other                |  |                |           |           |              |   | (4,611        | )            |  |   | (193,158     | ) |  |              |           |   |  |   | (197,769    | )
|Proceeds from sales of and returns of investments in real estate
    and other   |  |                |           |           |              |   | 22,106        |              |  |   | 596,999      |   |  |              |           |   |  |   | 619,105     |  
|Payment of capital contribution                                                  |  |                | (202,595   | )         |              |   | (126,420      | )            |  |   |             |   |  |              | 329,015    |   |  |   |            |  
|Net increase in affiliate lending                                                |  |                | (2,211,230 | )         |              |   |              |              |  |   |             |   |  |              | 2,211,230  |   |  |   |            |  
|Other, net                                                                       |  |                |           |           |              |   | 1,500,186     |              |  |   | 350,376      |   |  |              |           |   |  |   | 1,850,562   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) investing activities                              |  |                | (2,413,825 | )         |              |   | 1,954,466     |              |  |   | 12,959,787   |   |  |              | 2,520,378  |   |  |   | 15,020,806  |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net increase in affiliate borrowings                                             |  |                |           |           |              |   | 941,927       |              |  |   | 1,269,303    |   |  |              | (2,211,230 | ) |  |   |            |  
|Net decrease in other short-term borrowings                                      |  |                | (75,000    | )         |              |   | (3,757,120    | )            |  |   | (7,830,931   | ) |  |              |           |   |  |   | (11,663,051 | )
|Proceeds from issuance of collateralized borrowings in
    securitization trusts |  |                |           |           |              |   | 3,863,807     |              |  |   | 73,248       |   |  |              |           |   |  |   | 3,937,055   |  
|Repayments of collateralized borrowings in securitization trusts                 |  |                |           |           |              |   |              |              |  |   | (13,467,761  | ) |  |              |           |   |  |   | (13,467,761 | )
|Proceeds from secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | 12,158,635   |   |  |              |           |   |  |   | 12,158,635  |  
|Repayments of secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | (16,210,746  | ) |  |              |           |   |  |   | (16,210,746 | )
|Proceeds from other long-term borrowings                                         |  |                | 3,853,195  |           |              |   |              |              |  |   | 4,007,575    |   |  |              |           |   |  |   | 7,860,770   |  
|Repayments of other long-term borrowings                                         |  |                | (1,000,000 | )         |              |   |              |              |  |   | (1,654,264   | ) |  |              |           |   |  |   | (2,654,264  | )
|Payments of debt issuance costs                                                  |  |                | (14,216    | )         |              |   |              |              |  |   | (7,092       | ) |  |              |           |   |  |   | (21,308     | )
|Proceeds from capital contribution                                               |  |                | 2,000,000  |           |              |   |              |              |  |   | 585,015      |   |  |              | (329,015   | ) |  |   | 2,256,000   |  
|Disposal of healthcare business                                                  |  |                |           |           |              |   |              |              |  |   | 898,794      |   |  |              |           |   |  |   | 898,794     |  
|Dividends paid                                                                   |  |                |           |           |              |   |              |              |  |   | (2,474       | ) |  |              | 2,474      |   |  |   |            |  
|Decrease in deposit liabilities                                                  |  |                |           |           |              |   |              |              |  |   | 4,631,039    |   |  |              | 6,196      |   |  |   | 4,637,235   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) financing activities                              |  |                | 4,763,979  |           |              |   | 1,048,614     |              |  |   | (15,549,659  | ) |  |              | (2,531,575 | ) |  |   | (12,268,641 | )
|Effect of foreign exchange rates on cash and
    cash equivalents                |  |                | 151,121    |           |              |   |              |              |  |   | (303,554     | ) |  |              |           |   |  |   | (152,433    | )
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             |  |                | 2,500,014  |           |              |   | (356,167      | )            |  |   | 2,365,598    |   |  |              | (8,804     | ) |  |   | 4,500,641   |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                 |  |                | 832,600    |           |              |   | 456,895       |              |  |   | 756,225      |   |  |              | (26,873    | ) |  |   | 2,018,847   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                       |  | $              | 3,332,614  |           |              | $ | 100,728       |              |  | $ | 3,121,823    |   |  | $            | (35,677    | ) |  | $ | 6,519,488   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           











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RESIDENTIAL CAPITAL, LLC


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


Nine Months Ended September 30, 2006


|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|-------------------------------------------------------------------------------- |  | -------------- | ---------- | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | - |  | ------------ | ---------- | - |  | - | ----------- | -
|                                                                                 |  |                |            | Guarantor |              |   | Non-Guarantor |              |  |   |              |  
|                                                                                 |  | Parent         |            |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |   |  | Consolidated |           
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|                                                                                 |  | (In thousands) |           
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                              |  | $              | 190,461    |           |              | $ | (13,204,679   | )            |  | $ | (3,356,216   | ) |  | $            | 43,303     |   |  | $ | (16,327,131 | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net increase in lending receivables                                              |  |                |           |           |              |   | (127,333      | )            |  |   | (583,745     | ) |  |              |           |   |  |   | (711,078    | )
|Originations and purchases of mortgage loans held for investment                 |  |                |           |           |              |   | (8,511,950    | )            |  |   | (6,167,781   | ) |  |              | 1,363,276  |   |  |   | (13,316,455 | )
|Proceeds from sales and repayments of mortgage loans held for
    investment     |  |                |           |           |              |   | 3,050,644     |              |  |   | 17,279,450   |   |  |              | (1,366,988 | ) |  |   | 18,963,106  |  
|Proceeds from sales and repayments of available for sale
    securities          |  |                |           |           |              |   | 1,388         |              |  |   | 16,654       |   |  |              |           |   |  |   | 18,042      |  
|Additions to mortgage servicing rights                                           |  |                |           |           |              |   | (11,772       | )            |  |   |             |   |  |              |           |   |  |   | (11,772     | )
|Purchase of and advances to investments in real estate and other                 |  |                |           |           |              |   | (39,037       | )            |  |   | (1,414,350   | ) |  |              |           |   |  |   | (1,453,387  | )
|Proceeds from sales of and returns of investments in real estate
    and other   |  |                |           |           |              |   | 636,423       |              |  |   | 558,428      |   |  |              |           |   |  |   | 1,194,851   |  
|Payment of capital contribution                                                  |  |                | (100,000   | )         |              |   | (270,977      | )            |  |   |             |   |  |              | 370,977    |   |  |   |            |  
|Net increase in affiliate lending                                                |  |                | (3,302,948 | )         |              |   |              |              |  |   | 21,509       |   |  |              | 3,281,439  |   |  |   |            |  
|Other, net                                                                       |  |                | (63,800    | )         |              |   | 74,487        |              |  |   | 602,141      |   |  |              |           |   |  |   | 612,828     |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) investing activities                              |  |                | (3,466,748 | )         |              |   | (5,198,127    | )            |  |   | 10,312,306   |   |  |              | 3,648,704  |   |  |   | 5,296,135   |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                            |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Net increase (decrease) in affiliate borrowings                                  |  |                | (4,130,000 | )         |              |   | 1,597,028     |              |  |   | 636,949      |   |  |              | (3,281,439 | ) |  |   | (5,177,462  | )
|Net increase (decrease) in other short-term borrowings                           |  |                |           |           |              |   | (900,557      | )            |  |   | 3,660,459    |   |  |              | 2,615      |   |  |   | 2,762,517   |  
|Proceeds from issuance of collateralized borrowings in
    securitization trusts |  |                |           |           |              |   | 17,611,862    |              |  |   | 70,142       |   |  |              |           |   |  |   | 17,682,004  |  
|Repayments of collateralized borrowings in securitization trusts                 |  |                |           |           |              |   |              |              |  |   | (16,947,238  | ) |  |              |           |   |  |   | (16,947,238 | )
|Proceeds from secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | 18,956,393   |   |  |              |           |   |  |   | 18,956,393  |  
|Repayments of secured aggregation facilities, long-term                          |  |                |           |           |              |   |              |              |  |   | (19,962,782  | ) |  |              |           |   |  |   | (19,962,782 | )
|Proceeds from other long-term borrowings                                         |  |                | 6,956,965  |           |              |   |              |              |  |   | 4,878,145    |   |  |              |           |   |  |   | 11,835,110  |  
|Repayments of other long-term borrowings                                         |  |                |           |           |              |   |              |              |  |   | (406,716     | ) |  |              |           |   |  |   | (406,716    | )
|Payments of debt issuance costs                                                  |  |                | (46,122    | )         |              |   |              |              |  |   | (55,692      | ) |  |              |           |   |  |   | (101,814    | )
|Proceeds from capital contribution                                               |  |                |           |           |              |   | 100,000       |              |  |   | 270,977      |   |  |              | (370,977   | ) |  |   |            |  
|Disposal of healthcare business                                                  |  |                |            |           |              |   |               |              |  |   |              |   |  |              |            |   |  |   |             |  
|Dividends paid                                                                   |  |                |           |           |              |   |              |              |  |   | 30,706       |   |  |              | (30,706    | ) |  |   |            |  
|Increase in deposit liabilities                                                  |  |                |           |           |              |   |              |              |  |   | 2,108,164    |   |  |              | 26,195     |   |  |   | 2,134,359   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|Net cash provided by (used in) financing activities                              |  |                | 2,780,843  |           |              |   | 18,408,333    |              |  |   | (6,760,493   | ) |  |              | (3,654,312 | ) |  |   | 10,774,371  |  
|Effect of foreign exchange rates on cash and cash equivalents                    |  |                | (28,514    | )         |              |   |              |              |  |   | (3,772       | ) |  |              |           |   |  |   | (32,286     | )
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             |  |                | (523,958   | )         |              |   | 5,527         |              |  |   | 191,825      |   |  |              | 37,695     |   |  |   | (288,911    | )
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                   |  |                | 1,626,814  |           |              |   | 158,167       |              |  |   | 556,252      |   |  |              | (74,480    | ) |  |   | 2,266,753   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                       |  | $              | 1,102,856  |           |              | $ | 163,694       |              |  | $ | 748,077      |   |  | $            | (36,785    | ) |  | $ | 1,977,842   |  
|                                                                                 |  |                |            |           |              |   |               |              |  |   |              |   |  |              |           







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


General






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.
    This segment also provides collateralized lines of credit to
    other originators of residential mortgage loans, which we refer
    to as warehouse lending. Our banking activities through the
    mortgage division of GMAC Bank and our real estate brokerage and
    relocation business are also 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | International Business Group. Our International Business
    Group includes substantially all of our operations outside of
    the United States, and has businesses in the United Kingdom
    (which currently generates a significant portion of the
    segments financial results), Canada, Continental Europe,
    Latin America and Australia. We originate, purchase, sell and
    securitize residential mortgage loans. We also extend credit to
    companies involved in residential real estate development and
    provide commercial lending facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



Overview










32



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Results of Operations




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



33



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|                     |                       |                                       |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |        |  |  |         |         |  |   |        |         | 
|-------------------- | --------------------- | ------------------------------------- | ------ | ------- | ------------------------------- | - | ------ | ------ |  |  | -------- | ------- |  | ------ | ------ | ------ | -------- |  | ------- | ------- |  | - | -------- | ------ |  |  | ------- | ------- |  | - | ------ | ------- | 
|                     |                       | U.S. Mortgage Loan Production by Type |       
|                     |                       |                                       |       
|                     |                       | Three Months Ended September 30,      |        |         | Nine Months Ended September 30, |  
|                     |                       |                                       |        |         |                                 |  
|                     |                       | 2007                                  |        |         | 2006                            |   |        | 2007   |  |  | 2006     |        
|                     |                       |                                       |        |         |                                 |   |        |        |  |  |          |        
|                     |                       | Number                                |        |         | Dollar                          |   |        | Number |  |  | Dollar   |         |  | Number |        |        | Dollar   |  |         | Number  |  |   | Dollar   |       
|                     |                       | of                                    |        |         | Amount                          |   |        | of     |  |  | Amount   |         |  | of     |        |        | Amount   |  |         | of      |  |   | Amount   |       
|                     |                       | Loans                                 |        |         | of Loans                        |   |        | Loans  |  |  | of Loans |         |  | Loans  |        |        | of Loans |  |         | Loans   |  |   | of Loans |       
|                     |                       |                                       |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       
|                     |                       | (Dollars in millions)                 |       
|Prime conforming     |                       |                                       | 64,116 |         |                                 | $ | 12,174 |        |  |  | 64,897   |         |  | $      | 12,002 |        |          |  | 180,882 |         |  | $ | 34,425   |        |  |  | 175,640 |         |  | $ | 32,536 |        
|Prime non-conforming |                       |                                       | 12,174 |         |                                 |   | 4,606  |        |  |  | 55,444   |         |  |        | 16,411 |        |          |  | 77,909  |         |  |   | 26,771   |        |  |  | 140,795 |         |  |   | 42,776 |        
|Government           |                       |                                       | 13,241 |         |                                 |   | 1,378  |        |  |  | 6,460    |         |  |        | 942    |        |          |  | 70,833  |         |  |   | 5,458    |        |  |  | 19,971  |         |  |   | 2,884  |        
|Nonprime             |                       |                                       | 2,360  |         |                                 |   | 185    |        |  |  | 53,774   |         |  |        | 8,467  |        |          |  | 28,200  |         |  |   | 4,129    |        |  |  | 155,987 |         |  |   | 23,623 |        
|Prime second-lien    |                       |                                       | 26,004 |         |                                 |   | 1,863  |        |  |  | 102,314  |         |  |        | 6,100  |        |          |  | 124,712 |         |  |   | 7,616    |        |  |  | 315,994 |         |  |   | 18,500 |        
|                     |                       |                                       |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       
|                     | Total U.S. production |                                       |        | 117,895 |                                 |   | $      | 20,206 |  |  |          | 282,889 |  |        | $      | 43,922 |          |  |         | 482,536 |  |   | $        | 78,399 |  |  |         | 808,387 |  |   | $      | 120,319 | 
|                     |                       |                                       |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       



|                    |                 |                      |        |        |                     |   |        |        |  |   |        |        |  |   |         |        | 
|------------------- | --------------- | -------------------- | ------ | ------ | ------------------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------- | ------ | 
|                    |                 | For the Three Months |        |        | For the Nine Months |  
|                    |                 | Ended September 30,  |        |        | Ended September 30, |  
|                    |                 |                      |        |        |                     |  
|                    |                 | 2007                 |        |        | 2006                |   |        | 2007   |  |   | 2006   |       
|                    |                 |                      |        |        |                     |   |        |        |  |   |        |       
|                    |                 | (In millions)        |       
|Purpose:            |                 |                      |        |        |                     |   |        |        |  |   |        |        |  |   |         |       
|                    | Purchase        |                      | $      | 9,409  |                     |   | $      | 19,185 |  |   | $      | 29,544 |  |   | $       | 49,753 | 
|                    | Non-purchase    |                      |        | 10,797 |                     |   |        | 24,737 |  |   |        | 48,855 |  |   |         | 70,566 | 
|                    |                 |                      |        |        |                     |   |        |        |  |   |        |       
|                    |                 | $                    | 20,206 |        |                     | $ | 43,922 |        |  | $ | 78,399 |        |  | $ | 120,319 |       
|                    |                 |                      |        |        |                     |   |        |        |  |   |        |       
|                   
|Interest rate type: |                 |                      |        |        |                     |   |        |        |  |   |        |        |  |   |         |       
|                    | Fixed rate      |                      | $      | 16,191 |                     |   | $      | 25,219 |  |   | $      | 56,231 |  |   | $       | 67,335 | 
|                    | Adjustable rate |                      |        | 4,015  |                     |   |        | 18,703 |  |   |        | 22,168 |  |   |         | 52,984 | 
|                    |                 |                      |        |        |                     |   |        |        |  |   |        |       
|                    |                 | $                    | 20,206 |        |                     | $ | 43,922 |        |  | $ | 78,399 |        |  | $ | 120,319 |       
|                    |                 |                      |        |        |                     |   |        |        |  |   |        |       

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|                                                     |                       |                                          |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |        |  |  |         |         |  |   |        |         | 
|---------------------------------------------------- | --------------------- | ---------------------------------------- | ------ | ------- | ------------------------------- | - | ------ | ------ |  |  | -------- | ------- |  | ------ | ------ | ------ | -------- |  | ------- | ------- |  | - | -------- | ------ |  |  | ------- | ------- |  | - | ------ | ------- | 
|                                                     |                       | U.S. Mortgage Loan Production by Channel |       
|                                                     |                       |                                          |       
|                                                     |                       | Three Months Ended September 30,         |        |         | Nine Months Ended September 30, |  
|                                                     |                       |                                          |        |         |                                 |  
|                                                     |                       | 2007                                     |        |         | 2006                            |   |        | 2007   |  |  | 2006     |        
|                                                     |                       |                                          |        |         |                                 |   |        |        |  |  |          |        
|                                                     |                       | Number                                   |        |         | Dollar                          |   |        | Number |  |  | Dollar   |         |  | Number |        |        | Dollar   |  |         | Number  |  |   | Dollar   |       
|                                                     |                       | of                                       |        |         | Amount                          |   |        | of     |  |  | Amount   |         |  | of     |        |        | Amount   |  |         | of      |  |   | Amount   |       
|                                                     |                       | Loans                                    |        |         | of Loans                        |   |        | Loans  |  |  | of Loans |         |  | Loans  |        |        | of Loans |  |         | Loans   |  |   | of Loans |       
|                                                     |                       |                                          |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       
|                                                     |                       | (Dollars in millions)                    |       
|Retail branches                                      |                       |                                          | 18,618 |         |                                 | $ | 2,878  |        |  |  | 26,481   |         |  | $      | 3,865  |        |          |  | 60,545  |         |  | $ | 9,391    |        |  |  | 81,091  |         |  | $ | 11,697 |        
|Direct lending (other than retail branches)          |                       |                                          | 20,402 |         |                                 |   | 2,227  |        |  |  | 34,212   |         |  |        | 3,147  |        |          |  | 80,166  |         |  |   | 8,753    |        |  |  | 105,501 |         |  |   | 9,417  |        
|Mortgage brokers                                     |                       |                                          | 23,423 |         |                                 |   | 4,372  |        |  |  | 43,543   |         |  |        | 7,300  |        |          |  | 92,616  |         |  |   | 17,196   |        |  |  | 129,594 |         |  |   | 22,251 |        
|Correspondent lenders and secondary market purchases |                       |                                          | 55,452 |         |                                 |   | 10,729 |        |  |  | 178,653  |         |  |        | 29,610 |        |          |  | 249,209 |         |  |   | 43,059   |        |  |  | 492,201 |         |  |   | 76,954 |        
|                                                     |                       |                                          |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       
|                                                     | Total U.S. production |                                          |        | 117,895 |                                 |   | $      | 20,206 |  |  |          | 282,889 |  |        | $      | 43,922 |          |  |         | 482,536 |  |   | $        | 78,399 |  |  |         | 808,387 |  |   | $      | 120,319 | 
|                                                     |                       |                                          |        |         |                                 |   |        |        |  |  |          |         |  |        |        |        |          |  |         |         |  |   |          |       



|                   |                                |                                        |        |        |                                 |   |       |        |  |  |          |        |  |        |       |       |          |  |        |         |  |   |          |        |  |  |        |        |  |   |        |        | 
|------------------ | ------------------------------ | -------------------------------------- | ------ | ------ | ------------------------------- | - | ----- | ------ |  |  | -------- | ------ |  | ------ | ----- | ----- | -------- |  | ------ | ------- |  | - | -------- | ------ |  |  | ------ | ------ |  | - | ------ | ------ | 
|                   |                                | International Mortgage Loan Production |       
|                   |                                |                                        |       
|                   |                                | Three Months Ended September 30,       |        |        | Nine Months Ended September 30, |  
|                   |                                |                                        |        |        |                                 |  
|                   |                                | 2007                                   |        |        | 2006                            |   |       | 2007   |  |  | 2006     |       
|                   |                                |                                        |        |        |                                 |   |       |        |  |  |          |       
|                   |                                | Number                                 |        |        | Dollar                          |   |       | Number |  |  | Dollar   |        |  | Number |       |       | Dollar   |  |        | Number  |  |   | Dollar   |       
|                   |                                | of                                     |        |        | Amount                          |   |       | of     |  |  | Amount   |        |  | of     |       |       | Amount   |  |        | of      |  |   | Amount   |       
|                   |                                | Loans                                  |        |        | of Loans                        |   |       | Loans  |  |  | of Loans |        |  | Loans  |       |       | of Loans |  |        | Loans   |  |   | of Loans |       
|                   |                                |                                        |        |        |                                 |   |       |        |  |  |          |        |  |        |       |       |          |  |        |         |  |   |          |       
|                   |                                | (Dollars in millions)                  |       
|United Kingdom     |                                |                                        | 22,192 |        |                                 | $ | 6,538 |        |  |  | 25,916   |        |  | $      | 6,330 |       |          |  | 58,629 |         |  | $ | 16,163   |        |  |  | 68,151 |        |  | $ | 16,129 |       
|Continental Europe |                                |                                        | 10,230 |        |                                 |   | 1,941 |        |  |  | 4,372    |        |  |        | 784   |       |          |  | 28,890 |         |  |   | 5,427    |        |  |  | 14,581 |        |  |   | 2,593  |       
|Other              |                                |                                        | 5,018  |        |                                 |   | 589   |        |  |  | 3,302    |        |  |        | 417   |       |          |  | 14,531 |         |  |   | 1,668    |        |  |  | 8,081  |        |  |   | 1,014  |       
|                   |                                |                                        |        |        |                                 |   |       |        |  |  |          |        |  |        |       |       |          |  |        |         |  |   |          |       
|                   | Total International production |                                        |        | 37,440 |                                 |   | $     | 9,068  |  |  |          | 33,590 |  |        | $     | 7,531 |          |  |        | 102,050 |  |   | $        | 23,258 |  |  |        | 90,813 |  |   | $      | 19,736 | 
|                   |                                |                                        |        |        |                                 |   |       |        |  |  |          |        |  |        |       |       |          |  |        |         |  |   |          |       



|                                                              |  |                    |          |   |                   |   |        |      |  |   |          |   |  |   |          |  
|------------------------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | ------ | ---- |  | - | -------- | - |  | - | -------- | -
|                                                              |  | Three Months Ended |          |   | Nine Months Ended |  
|                                                              |  | September 30,      |          |   | September 30,     |  
|                                                              |  |                    |          |   |                   |  
|                                                              |  | 2007               |          |   | 2006              |   |        | 2007 |  |   | 2006     |  
|                                                              |  |                    |          |   |                   |   |        |      |  |   |          |  
|                                                              |  | (In millions)      |         
|Net interest income                                           |  | $                  | 205.3    |   |                   | $ | 382.0  |      |  | $ | 907.1    |   |  | $ | 1,262.0  |  
|Provision for loan losses                                     |  |                    | (884.2   | ) |                   |   | (238.7 | )    |  |   | (1,759.6 | ) |  |   | (484.1   | )
|Gain (loss) on sale of mortgage loans, net                    |  |                    | (569.6   | ) |                   |   | 236.8  |      |  |   | (630.7   | ) |  |   | 878.8    |  
|Servicing fees                                                |  |                    | 451.4    |   |                   |   | 401.1  |      |  |   | 1,350.7  |   |  |   | 1,162.3  |  
|Servicing asset valuation and hedge activities, net           |  |                    | (123.4   | ) |                   |   | (331.3 | )    |  |   | (577.3   | ) |  |   | (687.6   | )
|                                                              |  |                    |          |   |                   |   |        |      |  |   |          |  
|Net servicing fees                                            |  |                    | 328.0    |   |                   |   | 69.8   |      |  |   | 773.4    |   |  |   | 474.7    |  
|Other income (expense)                                        |  |                    | (262.3   | ) |                   |   | 342.8  |      |  |   | 244.7    |   |  |   | 1,176.9  |  
|Operating expenses                                            |  |                    | (1,173.0 | ) |                   |   | (643.7 | )    |  |   | (2,876.0 | ) |  |   | (1,941.1 | )
|Income (loss) before income tax expense and minority interest |  |                    | (2,355.8 | ) |                   |   | 149.0  |      |  |   | (3,341.1 | ) |  |   | 1,367.2  |  
|Income tax expense (benefit)                                  |  |                    | (119.5   | ) |                   |   | 65.6   |      |  |   | 16.2     |   |  |   | 534.1    |  
|Income (loss) before minority interest                        |  |                    | (2,236.3 | ) |                   |   | 83.4   |      |  |   | (3,357.3 | ) |  |   | 833.1    |  
|Minority interest                                             |  |                    | 24.6     |   |                   |   |       |      |  |   | 68.1     |   |  |   |         |  
|                                                              |  |                    |          |   |                   |   |        |      |  |   |          |  
|Net income (loss)                                             |  | $                  | (2,260.9 | ) |                   | $ | 83.4   |      |  | $ | (3,425.4 | ) |  | $ | 833.1    |  
|                                                              |  |                    |          |   |                   |   |        |      |  |   |          |  



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|                                    |                                    |                                        |           |           |                   |   |         |         |  |  |           |           |  |   |         |         | 
|----------------------------------- | ---------------------------------- | -------------------------------------- | --------- | --------- | ----------------- | - | ------- | ------- |  |  | --------- | --------- |  | - | ------- | ------- | 
|                                    |                                    | U.S. Mortgage Loan Servicing Portfolio |          
|                                    |                                    |                                        |          
|                                    |                                    | September 30, 2007                     |           |           | December 31, 2006 |  
|                                    |                                    |                                        |           |           |                   |  
|                                    |                                    | Number                                 |           |           | Dollar            |   |         | Number  |  |  | Dollar    |          
|                                    |                                    | of                                     |           |           | Amount            |   |         | of      |  |  | Amount    |          
|                                    |                                    | Loans                                  |           |           | of Loans          |   |         | Loans   |  |  | of Loans  |          
|                                    |                                    |                                        |           |           |                   |   |         |         |  |  |           |          
|                                    |                                    | (Dollars in millions)                  |          
|Prime conforming mortgage loans     |                                    |                                        | 1,638,783 |           |                   | $ | 263,437 |         |  |  | 1,456,344 |           |  | $ | 203,927 |        
|Prime non-conforming mortgage loans |                                    |                                        | 214,948   |           |                   |   | 66,785  |         |  |  | 319,255   |           |  |   | 101,138 |        
|Government mortgage loans           |                                    |                                        | 178,348   |           |                   |   | 18,975  |         |  |  | 181,563   |           |  |   | 18,843  |        
|Nonprime mortgage loans             |                                    |                                        | 330,128   |           |                   |   | 44,190  |         |  |  | 409,516   |           |  |   | 55,750  |        
|Prime second-lien mortgage loans    |                                    |                                        | 787,524   |           |                   |   | 34,053  |         |  |  | 784,170   |           |  |   | 32,726  |        
|                                    |                                    |                                        |           |           |                   |   |         |         |  |  |           |          
|                                    | Total primary servicing portfolio* |                                        |           | 3,149,731 |                   |   | $       | 427,440 |  |  |           | 3,150,848 |  |   | $       | 412,384 | 
|                                    |                                    |                                        |           |           |                   |   |         |         |  |  |           |          






|  |                                                                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excludes loans for which we acted as a subservicer. Subserviced
    loans totaled 250,148 with an unpaid principal balance of
    $52.3 billion at September 30, 2007 and 290,992 with
    an unpaid principal balance of $55.4 billion at
    December 31, 2006.



off-balance








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| |                
| | ---------------
| | Segment Results



| |                          
| | -------------------------
| | Residential Finance Group



|                                                    |  |                    |          |   |                   |   |        |      |  |   |          |   |  |   |          |  
|--------------------------------------------------- |  | ------------------ | -------- | - | ----------------- | - | ------ | ---- |  | - | -------- | - |  | - | -------- | -
|                                                    |  | Three Months Ended |          |   | Nine Months Ended |  
|                                                    |  | September 30,      |          |   | September 30,     |  
|                                                    |  |                    |          |   |                   |  
|                                                    |  | 2007               |          |   | 2006              |   |        | 2007 |  |   | 2006     |  
|                                                    |  |                    |          |   |                   |   |        |      |  |   |          |  
|                                                    |  | (In millions)      |         
|Net interest income                                 |  | $                  | 170.6    |   |                   | $ | 297.7  |      |  | $ | 756.0    |   |  | $ | 1,034.9  |  
|Provision for loan losses                           |  |                    | (765.8   | ) |                   |   | (214.5 | )    |  |   | (1,554.4 | ) |  |   | (448.5   | )
|Gain (loss) on sale of mortgage loans, net          |  |                    | (107.1   | ) |                   |   | 214.1  |      |  |   | (350.5   | ) |  |   | 751.5    |  
|Servicing fees                                      |  |                    | 434.7    |   |                   |   | 398.3  |      |  |   | 1,303.0  |   |  |   | 1,160.0  |  
|Servicing asset valuation and hedge activities, net |  |                    | (122.0   | ) |                   |   | (330.4 | )    |  |   | (574.7   | ) |  |   | (686.7   | )
|                                                    |  |                    |          |   |                   |   |        |      |  |   |          |  
|Net servicing fees                                  |  |                    | 312.7    |   |                   |   | 67.9   |      |  |   | 728.3    |   |  |   | 473.3    |  
|Other income (expense)                              |  |                    | (268.3   | ) |                   |   | 281.3  |      |  |   | (115.8   | ) |  |   | 504.1    |  
|Operating expenses                                  |  |                    | (897.0   | ) |                   |   | (587.4 | )    |  |   | (2,205.1 | ) |  |   | (1,727.8 | )
|Income tax expense                                  |  |                    | (21.2    | ) |                   |   | (24.3  | )    |  |   | (94.3    | ) |  |   | (250.1   | )
|                                                    |  |                    |          |   |                   |   |        |      |  |   |          |  
|Net income (loss)                                   |  | $                  | (1,576.1 | ) |                   | $ | 34.8   |      |  | $ | (2,835.8 | ) |  | $ | 337.4    |  
|                                                    |  |                    |          |   |                   |   |        |      |  |   |          |  







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second-lien








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



|                             |  |                     |        |   |                     |   |       |      |  |   |        |   |  |   |        |  
|---------------------------- |  | ------------------- | ------ | - | ------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                             |  | Three Months        |        |   | Nine Months         |  
|                             |  | Ended September 30, |        |   | Ended September 30, |  
|                             |  |                     |        |   |                     |  
|                             |  | 2007                |        |   | 2006                |   |       | 2007 |  |   | 2006   |  
|                             |  |                     |        |   |                     |   |       |      |  |   |        |  
|                             |  | (In millions)       |       
|Net interest income          |  | $                   | 22.7   |   |                     | $ | 23.8  |      |  | $ | 88.7   |   |  | $ | 67.0   |  
|Provision for loan losses    |  |                     | (92.4  | ) |                     |   | (8.3  | )    |  |   | (149.8 | ) |  |   | (13.1  | )
|Other income (expense)       |  |                     | (78.2  | ) |                     |   | 60.7  |      |  |   | 9.1    |   |  |   | 632.9  |  
|Operating expenses           |  |                     | (24.9  | ) |                     |   | (21.6 | )    |  |   | (62.5  | ) |  |   | (57.7  | )
|Income tax (expense) benefit |  |                     | 0.9    |   |                     |   | (23.4 | )    |  |   | 0.5    |   |  |   | (244.7 | )
|                             |  |                     |        |   |                     |   |       |      |  |   |        |  
|Net income (loss)            |  | $                   | (171.9 | ) |                     | $ | 31.2  |      |  | $ | (114.0 | ) |  | $ | 384.4  |  
|                             |  |                     |        |   |                     |   |       |      |  |   |        |  











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



|                                              |  |                    |        |   |                   |   |       |      |  |   |        |   |  |   |        |  
|--------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                              |  | Three Months Ended |        |   | Nine Months Ended |  
|                                              |  | September 30,      |        |   | September 30,     |  
|                                              |  |                    |        |   |                   |  
|                                              |  | 2007               |        |   | 2006              |   |       | 2007 |  |   | 2006   |  
|                                              |  |                    |        |   |                   |   |       |      |  |   |        |  
|                                              |  | (In millions)      |       
|Net interest income                           |  | $                  | 21.5   |   |                   | $ | 46.7  |      |  | $ | 81.2   |   |  | $ | 130.6  |  
|Provision for loan losses                     |  |                    | (22.4  | ) |                   |   | (15.9 | )    |  |   | (45.0  | ) |  |   | (22.5  | )
|Gain (loss) on sale of mortgage loans, net    |  |                    | (462.5 | ) |                   |   | 22.6  |      |  |   | (280.2 | ) |  |   | 129.0  |  
|Servicing fees                                |  |                    | 16.7   |   |                   |   | 2.8   |      |  |   | 47.7   |   |  |   | 2.3    |  
|Servicing valuation and hedge activities, net |  |                    | (1.4   | ) |                   |   | (1.0  | )    |  |   | (2.6   | ) |  |   | (0.9   | )
|                                              |  |                    |        |   |                   |   |       |      |  |   |        |  
|Net servicing fees                            |  |                    | 15.3   |   |                   |   | 1.8   |      |  |   | 45.1   |   |  |   | 1.4    |  
|Other income (expense)                        |  |                    | (53.2  | ) |                   |   | 0.2   |      |  |   | (22.9  | ) |  |   | 39.3   |  
|Operating expenses                            |  |                    | (158.4 | ) |                   |   | (65.8 | )    |  |   | (347.8 | ) |  |   | (184.0 | )
|Income tax (expense) benefit                  |  |                    | 161.7  |   |                   |   | 1.7   |      |  |   | 131.4  |   |  |   | (21.0  | )
|                                              |  |                    |        |   |                   |   |       |      |  |   |        |  
|Net income (loss)                             |  | $                  | (498.0 | ) |                   | $ | (8.7  | )    |  | $ | (438.2 | ) |  | $ | 72.8   |  
|                                              |  |                    |        |   |                   |   |       |      |  |   |        |  











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





Asset Quality




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



|                                              |  |                |         |   |             |   |        |       |  |   |       |   |  |   |          |  
|--------------------------------------------- |  | -------------- | ------- | - | ----------- | - | ------ | ----- |  | - | ----- | - |  | - | -------- | -
|                                              |  | Mortgage Loans |         |   |             |   |        |       | 
|                                              |  | Held for       |         |   | Lending     |   |        |       |  |  
|                                              |  | Investment     |         |   | Receivables |   |        | Other |  |   | Total |  
|                                              |  |                |         |   |             |   |        |       |  |   |       |  
|                                              |  | (In millions)  |        
|Balance at January 1, 2007                    |  | $              | 1,508.4 |   |             | $ | 396.6  |       |  | $ | 25.8  |   |  | $ | 1,930.8  |  
|Provision for loan losses                     |  |                | 1,436.3 |   |             |   | 313.5  |       |  |   | 9.8   |   |  |   | 1,759.6  |  
|Charge-offs                                   |  |                | (943.9  | ) |             |   | (393.1 | )     |  |   | (8.0  | ) |  |   | (1,345.0 | )
|Reduction of allowance due to deconsolidation |  |                | (306.5  | ) |             |   |       |       |  |   |      |   |  |   | (306.5   | )
|Recoveries                                    |  |                | 39.9    |   |             |   | 8.9    |       |  |   | 3.7   |   |  |   | 52.5     |  
|                                              |  |                |         |   |             |   |        |       |  |   |       |  
|Balance at September 30, 2007                 |  | $              | 1,734.2 |   |             | $ | 325.9  |       |  | $ | 31.3  |   |  | $ | 2,091.4  |  
|                                              |  |                |         |   |             |   |        |       |  |   |       |  

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|                                    |                    |                |         |      |             |   |       |       |   |   |       |      |   |   |         |      |  
|----------------------------------- | ------------------ | -------------- | ------- | ---- | ----------- | - | ----- | ----- | - | - | ----- | ---- | - | - | ------- | ---- | -
|                                    |                    | Mortgage Loans |         |      |             |   |       |       |  
|                                    |                    | Held for       |         |      | Lending     |   |       |       |   |  
|                                    |                    | Investment     |         |      | Receivables |   |       | Other |   |   | Total |     
|                                    |                    |                |         |      |             |   |       |       |   |   |       |     
|                                    |                    | (In millions)  |        
|Balance at January 1, 2006          |                    | $              | 1,065.9 |      |             | $ | 187.4 |       |   | $ |      |      |   | $ | 1,253.3 |     
|Provision for loan losses           |                    |                | 470.5   |      |             |   | 13.6  |       |   |   |      |      |   |   | 484.1   |     
|Charge-offs                         |                    |                | (482.4  | )    |             |   | (5.7  | )     |   |   |      |      |   |   | (488.1  | )   
|Recoveries                          |                    |                | 34.2    |      |             |   | 0.8   |       |   |   |      |      |   |   | 35.0    |     
|                                    |                    |                |         |      |             |   |       |       |   |   |       |     
|Balance at September 30, 2006       |                    | $              | 1,088.2 |      |             | $ | 196.1 |       |   | $ |      |      |   | $ | 1,284.3 |     
|                                    |                    |                |         |      |             |   |       |       |   |   |       |     
|Allowance as a percentage of total: |                    |                |         |      |             |   |       |       |   |   |       |      |   |   |         |     
|                                    | September 30, 2007 |                |         | 2.85 | %           |   |       | 3.72  | % |   |       | 1.42 | % |   |         | 2.92 | %
|                                    | December 31, 2006  |                |         | 2.17 | %           |   |       | 2.66  | % |   |       | 1.03 | % |   |         | 2.22 | %



|                      |                      |                    |        |        |                   |   |        |        |   |   |          |        |   |   |        |        |  
|--------------------- | -------------------- | ------------------ | ------ | ------ | ----------------- | - | ------ | ------ | - | - | -------- | ------ | - | - | ------ | ------ | -
|                      |                      | Three Months Ended |        |        | Nine Months Ended |  
|                      |                      | September 30,      |        |        | September 30,     |  
|                      |                      |                    |        |        |                   |  
|                      |                      | 2007               |        |        | 2006              |   |        | 2007   |   |   | 2006     |       
|                      |                      |                    |        |        |                   |   |        |        |   |   |          |       
|                      |                      | (In millions)      |       
|Mortgage loans:       |                      |                    |        |        |                   |   |        |        |   |   |          |        |   |   |        |       
|                      | Prime conforming     |                    | $      | (1.3   | )                 |   | $      | (0.2   | ) |   | $        | (2.4   | ) |   | $      | (1.0   | )
|                      | Prime non-conforming |                    |        | (21.0  | )                 |   |        | (5.6   | ) |   |          | (33.2  | ) |   |        | (22.6  | )
|                      | Prime second-lien    |                    |        | (63.8  | )                 |   |        | (8.1   | ) |   |          | (123.4 | ) |   |        | (10.8  | )
|                      | Nonprime             |                    |        | (356.4 | )                 |   |        | (171.0 | ) |   |          | (744.9 | ) |   |        | (413.8 | )
|                      | Government           |                    |        | (0.1   | )                 |   |        |       |   |   |          | (0.1   | ) |   |        |       |  
|Lending receivables:  |                      |                    |        |        |                   |   |        |        |   |   |          |        |   |   |        |       
|                      | Warehouse            |                    |        | (9.2   | )                 |   |        | 0.1    |   |   |          | (351.9 | ) |   |        | (0.1   | )
|                      | Construction         |                    |        | (12.0  | )                 |   |        | 0.3    |   |   |          | (12.0  | ) |   |        | 0.3    |  
|                      | Other                |                    |        | (20.3  | )                 |   |        |       |   |   |          | (20.3  | ) |   |        | (5.1   | )
|Other                 |                      |                    | (1.2   | )      |                   |   |       |        |   |   | (4.3     | )      |   |   |       |       
|                      |                      |                    |        |        |                   |   |        |        |   |   |          |       
|Total net charge-offs |                      | $                  | (485.3 | )      |                   | $ | (184.5 | )      |   | $ | (1,292.5 | )      |   | $ | (453.1 | )     
|                      |                      |                    |        |        |                   |   |        |        |   |   |          |       



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



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|                                                                                                               |                      |                       |          |     |              |   |         |               |         |   |         |   |         | 
|-------------------------------------------------------------------------------------------------------------- | -------------------- | --------------------- | -------- | --- | ------------ | - | ------- | ------------- | ------- | - | ------- | - | ------- | 
|                                                                                                               |                      | September 30,         |          |     | December 31, |   |         | September 30, |        
|                                                                                                               |                      | 2007                  |          |     | 2006         |   |         | 2006          |        
|                                                                                                               |                      |                       |          |     |              |   |         |               |        
|                                                                                                               |                      | (Dollars in millions) |         
|Nonaccrual loans:                                                                                              |                      |                       |          |     |              |   |         |               |         |   |         |  
|                                                                                                               | Mortgage loans:      |                       |          |     |              |   |         |               |         |   |         |   |        
|                                                                                                               |                      | Prime conforming      |          | $   | 74.2         |   |         | $             | 11.3    |   |         | $ | 9.8     | 
|                                                                                                               |                      | Prime non-conforming  |          |     | 668.9        |   |         |               | 419.4   |   |         |   | 371.3   | 
|                                                                                                               |                      | Government            |          |     | 78.2         |   |         |               | 0.2     |   |         |   | 0.2     | 
|                                                                                                               |                      | Prime second-lien     |          |     | 197.3        |   |         |               | 142.1   |   |         |   | 132.6   | 
|                                                                                                               |                      | Nonprime*             |          |     | 7,538.3      |   |         |               | 6,736.2 |   |         |   | 6,274.8 | 
|                                                                                                               | Lending receivables: |                       |          |     |              |   |         |               |         |   |         |   |        
|                                                                                                               |                      | Warehouse**           |          |     | 112.4        |   |         |               | 1,317.7 |   |         |   | 9.5     | 
|                                                                                                               |                      | Construction***       |          |     | 324.0        |   |         |               | 68.8    |   |         |   | 20.9    | 
|                                                                                                               | Other                |                       |          | 0.1 |              |   |         | 0.1           |         |   |         |  |        
|                                                                                                               |                      |                       |          |     |              |   |         |               |        
|Total nonaccrual loans                                                                                         |                      |                       | 8,993.4  |     |              |   | 8,695.8 |               |         |   | 6,819.1 |  
|Restructured loans                                                                                             |                      |                       | 60.2     |     |              |   | 7.8     |               |         |   | 12.1    |  
|Foreclosed assets                                                                                              |                      |                       | 1,601.3  |     |              |   | 1,140.7 |               |         |   | 922.2   |  
|                                                                                                               |                      |                       |          |     |              |   |         |               |        
|Total nonperforming assets                                                                                     |                      | $                     | 10,654.9 |     |              | $ | 9,844.3 |               |         | $ | 7,753.4 |  
|                                                                                                               |                      |                       |          |     |              |   |         |               |        
|Total nonaccrual loans as a percentage of total mortgage loans
    held for investment and lending receivables |                      |                       | 12.9     | %   |              |   | 10.3    | %             |         |   | 7.7     | %
|                                                                                                               |                      |                       |          |     |              |   |         |               |        
|Total nonperforming assets as a percentage of total consolidated
    assets                                    |                      |                       | 9.3      | %   |              |   | 7.3     | %             |         |   | 5.8     | %
|                                                                                                               |                      |                       |          |     |              |   |         |               |        






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | Includes $2.1 billion as of September 30, 2007,
    $414.7 million as of December 31, 2006 and
    $340.0 million as of September 30, 2006 of loans that
    were purchased distressed and already in nonaccrual status. In
    addition, includes $24.4 and $3.3 million as of
    September 30, 2007 and December 31, 2006,
    respectively, of nonaccrual loans that are not included in
    Restructured Loans.



| |    |                                                                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ** | Includes $405.7 and $10.1 million of nonaccrual loans as of
    September 30, 2007 and December 31, 2006,
    respectively, that are not included in Restructured
    Loans.



|    |                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*** | Includes $23.9, $18.8 and $20.9 million of nonaccrual loans
    as of September 30, 2007, December 31, 2006 and
    September 30, 2006, respectively, that are not included in
    Restructured Loans.



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|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |   |        |       |  |  |       |     | 
|------------------------------ | --------------- | --------------------- | ------ | ---------- | ------------------ |  | ----- | ------------------- | ------- | - | -------- | ----- |  | ---------- | ----- | --- | ----- | - | ------ | ----- |  |  | ----- | --- | 
|                               |                 | As of September 30,   |        |            | As of December 31, |  |       | As of September 30, |        
|                               |                 |                       |        |            |                    |  |       |                     |        
|                               |                 | 2007                  |        |            | 2006               |  |       | 2006                |        
|                               |                 |                       |        |            |                    |  |       |                     |        
|                               |                 |                       |        | Percent of |                    |  |       |                     | Percent |   |          |       |  | Percent of |      
|                               |                 | Amount                |        |            | Total              |  |       | Amount              |         |   | of Total |       |  | Amount     |       |     | Total |  
|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |  
|                               |                 | (Dollars in millions) |       
|Current                        |                 | $                     | 48,846 |            |                    |  | 79.7  | %                   |         | $ | 55,964   |       |  |            | 81.3  | %   |       | $ | 61,299 |       |  |  | 83.6  | %  
|Past due:                      |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |   |        |       |  |  |       |    
|                               | 30 to 59 days   |                       |        | 3,252      |                    |  |       | 5.3                 |         |   |          | 4,273 |  |            |       | 6.2 |       |   |        | 4,284 |  |  |       | 5.8 | 
|                               | 60 to 89 days   |                       |        | 1,563      |                    |  |       | 2.5                 |         |   |          | 1,818 |  |            |       | 2.6 |       |   |        | 1,830 |  |  |       | 2.5 | 
|                               | 90 days or more |                       |        | 3,406      |                    |  |       | 5.6                 |         |   |          | 3,403 |  |            |       | 5.0 |       |   |        | 2,757 |  |  |       | 3.8 | 
|Foreclosures pending           |                 |                       | 2,868  |            |                    |  | 4.7   |                     |         |   | 2,132    |       |  |            | 3.1   |     |       |   | 1,937  |       |  |  | 2.6   |    
|Bankruptcies                   |                 |                       | 1,329  |            |                    |  | 2.2   |                     |         |   | 1,219    |       |  |            | 1.8   |     |       |   | 1,250  |       |  |  | 1.7   |    
|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |  
|Total unpaid principal balance |                 |                       | 61,264 |            |                    |  | 100.0 | %                   |         |   | 68,809   |       |  |            | 100.0 | %   |       |   | 73,357 |       |  |  | 100.0 | %  
|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |  
|Net premiums (discount)        |                 |                       | (492   | )          |                    |  |       |                     |         |   | 627      |       |  |            |       |     |       |   | 801    |       |  |  |       |    
|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |  
|Total                          |                 | $                     | 60,772 |            |                    |  |       |                     |         | $ | 69,436   |       |  |            |       |     |       | $ | 74,158 |       |  |  |       |    
|                               |                 |                       |        |            |                    |  |       |                     |         |   |          |       |  |            |       |     |       |  







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|                                                                  |                                                  |                          |   |          |                    |  |   |          | 
|----------------------------------------------------------------- | ------------------------------------------------ | ------------------------ | - | -------- | ------------------ |  | - | -------- | 
|                                                                  |                                                  | Unpaid Principal Balance |  
|                                                                  |                                                  |                          |  
|                                                                  |                                                  | As of September 30,      |   |          | As of December 31, | 
|                                                                  |                                                  | 2007                     |   |          | 2006               | 
|                                                                  |                                                  |                          |   |          |                    | 
|                                                                  |                                                  | (In millions)            |  
|Mortgage Loans Held for
    Sale  Domestic                       |                                                  |                          |   |          |                    |  |   |         
|                                                                  | Interest-only mortgage loans                     |                          | $ | 1,117.8  |                    |  | $ | 4,999.8  | 
|                                                                  | Payment option adjustable rate mortgage loans    |                          |   | 1.1      |                    |  |   | 1,838.1  | 
|                                                                  | High loan-to-value (100% or more) mortgage loans |                          |   | 42.3     |                    |  |   | 770.3    | 
|                                                                  | Below market initial rate mortgage loans         |                          |   | 5.3      |                    |  |   | 24.9     | 
|                                                                 
|Mortgage Loans Held for
    Investment  Domestic                 |                                                  |                          |   |          |                    |  |   |         
|                                                                  | Interest-only mortgage loans                     |                          | $ | 12,450.4 |                    |  | $ | 12,521.3 | 
|                                                                  | Payment option adjustable rate mortgage loans    |                          |   | 1,664.9  |                    |  |   | 117.0    | 
|                                                                  | High loan-to-value (100% or more) mortgage loans |                          |   | 8,655.5  |                    |  |   | 11,043.3 | 
|                                                                  | Below market initial rate mortgage loans         |                          |   | 121.0    |                    |  |   | 167.2    | 
|                                                                 
|Mortgage Loans  Held for Sale and
    Investment  International |                                                  |                          |   |          |                    |  |   |         
|                                                                  | Interest-only mortgage loans                     |                          | $ | 5,546.3  |                    |  | $ | 4,895.1  | 
|                                                                  | Payment option adjustable rate mortgage loans    |                          |   |         |                    |  |   |         | 
|                                                                  | High loan-to-value (100% or more) mortgage loans |                          |   | 1,195.9  |                    |  |   | 164.2    | 
|                                                                  | Below market initial rate mortgage loans         |                          |   |         |                    |  |   |         | 



|                                                 |  |                         |          |  |      |   |          | 
|------------------------------------------------ |  | ----------------------- | -------- |  | ---- | - | -------- | 
|                                                 |  | Loan Production for the |         
|                                                 |  | Nine Months Ended       |         
|                                                 |  | September 30,           |         
|                                                 |  |                         |         
|                                                 |  | 2007                    |          |  | 2006 |  
|                                                 |  |                         |          |  |      |  
|                                                 |  | (In millions)           |         
|Interest-only mortgage loans                     |  | $                       | 25,063.5 |  |      | $ | 35,017.5 | 
|Payment option adjustable rate mortgage loans    |  |                         | 7,573.2  |  |      |   | 14,045.0 | 
|High loan-to-value (100% or more) mortgage loans |  |                         | 4,818.0  |  |      |   | 6,294.1  | 
|Below market initial rate mortgage loans         |  |                         | 36.1     |  |      |   | 194.6    | 





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Liquidity and Capital Resources




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





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining sufficient reserve liquidity: We maintain a
    portfolio of money market instruments to support cash
    fluctuations, which we consider our liquidity portfolio. As of
    September 30, 2007, our liquidity portfolio totaled
    $4.0 billion. The Company views its liquidity portfolio as
    cash readily available to cover operating demands from across
    its business operations. In the Companys view, liquidity
    differs from cash and cash equivalents of $6.5 billion in
    that liquidity does not include cash balances within GMAC Bank
    and operating cash maintained within business segments to cover
    timing related outflows. In addition to our liquidity portfolio,
    we maintain domestic unsecured revolving bank credit facilities
    that are available to cover contingent funding needs. We have an
    $875.0 million
    364-day revolving bank
    credit facility that matures in June 2008 and an
    $875.0 million
    3-year revolving bank
    credit facility that matures in June 2010. Our Canadian
    operations maintain a C$410.0 million Canadian syndicated
    bank line, which is committed through December 2007.
|
| |  | Maintaining sufficient 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. We forecast our cash position
    and our potential funding needs daily, taking into account debt
    maturities and potential peak balance sheet levels over a
    medium-term time horizon. We also manage the timing of all debt
    maturities to limit any concentrations. As of September 30,
    2007, outstanding balance of short-term liquidity totaled
    $18.5 billion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | - | Long-term financing: Our long-term financing needs arise
    primarily from our mortgage loans held for investment, mortgage
    servicing rights, real estate investments and assets used for
    over-collateralization of our funding conduits. We manage our
    long-term debt maturities and credit facility expirations to
    minimize refinancing risk and maturity concentrations. Further,
    we endeavor to obtain an appropriate debt funding mix to
    complement our equity capital. We consider the available
    capacity and relative cost given market constraints, as well as
    our commitment to our credit ratings. We regularly assess the
    term structure of our assets and liabilities and interest rate
    risk. We limit the liability maturities in any one period
    (monthly, quarterly and annually). Consequently, we have
    achieved what we believe is a well-laddered unsecured maturity
    profile. Our long-term debt typically consists of collateralized
    borrowings in securitization trusts and unsecured debt issued in
    the public debt capital markets.

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|                                          |  |               |      |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       |  |   |         |  |  |   |          | 
|----------------------------------------- |  | ------------- | ---- | ------------------------ | ---- | - | -------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---------- | - | ------- | ----- |  | - | ------- |  |  | - | -------- | 
|                                          |  |               |      | Year Ending December 31, |     
|                                          |  | Fourth        |      |                          |      |  
|                                          |  | Quarter       |      |                          |      |   | 2012 and |      |  |  
|                                          |  | 2007          |      |                          | 2008 |   |          | 2009 |  |   | 2010    |  |  | 2011 |         |  | Thereafter |   |         | Total | 
|                                          |  |               |      |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       | 
|                                          |  | (In millions) |     
|Domestic senior unsecured notes           |  | $             |     |                          |      | $ | 2,500.3  |      |  | $ | 1,750.0 |  |  | $    | 2,466.5 |  |            | $ | 1,511.5 |       |  | $ | 3,786.9 |  |  | $ | 12,015.2 | 
|Domestic subordinated unsecured notes     |  |               |     |                          |      |   |         |      |  |   | 1,000.0 |  |  |      |        |  |            |   |        |       |  |   |        |  |  |   | 1,000.0  | 
|Domestic third-party bank credit facility |  |               |     |                          |      |   | 1,750.0  |      |  |   |        |  |  |      |        |  |            |   |        |       |  |   |        |  |  |   | 1,750.0  | 
|International unsecured notes             |  |               |     |                          |      |   |         |      |  |   |        |  |  |      | 850.5   |  |            |   |        |       |  |   | 2,653.1 |  |  |   | 3,503.6  | 
|Other unsecured
    long-term debt        |  |               | 84.2 |                          |      |   | 251.7    |      |  |   | 232.9   |  |  |      | 8.5     |  |            |   |        |       |  |   | 164.9   |  |  |   | 742.2    | 
|                                          |  |               |      |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       | 
|Total                                     |  | $             | 84.2 |                          |      | $ | 4,502.0  |      |  | $ | 2,982.9 |  |  | $    | 3,325.5 |  |            | $ | 1,511.5 |       |  | $ | 6,604.9 |  |  | $ | 19,011.0 | 
|                                          |  |               |      |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       | 



| |   |                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining diversified sources of funding: The funding
    sources utilized are primarily determined by the type of asset
    financed and associated with a particular product or business.
    We diversify our financing programs, credit providers, debt
    investors and dealers to reduce reliance upon any one source of
    liquidity and distribution. These sources of liquidity include:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | 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-backed securities markets. Also, we obtain liquidity
    and long-term funding in the term securitization market for our
    held for investment mortgage loan portfolio.                                                                                                   
|
| | - | Unsecured funding sources at the ResCap parent level:
    ResCap has historically had access to the unsecured debt market
    to further diversify its funding sources. Where legal entity,
    regulatory, country differences or other business segment
    considerations make reliance on parent funding impractical, some
    business segments enter into their own financing arrangements.
    We regularly assess the reliability and concentrations of our
    funding sources.
|
| | - | 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 and obtain Federal Home Loan Bank
    (FHLB) advances and federal funds purchased. The
    FHLBs financing support is uncommitted and requests for
    additional advances are evaluated at the time they are received.                                                                                               



|              |  |         |       |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       |  |   |         |  |  |   |          | 
|------------- |  | ------- | ----- | ------------------------ | ---- | - | -------- | ---- |  | - | ------- |  |  | ---- | ------- |  | ---------- | - | ------- | ----- |  | - | ------- |  |  | - | -------- | 
|              |  |         |       | Year Ending December 31, |     
|              |  | Fourth  |       |                          |      |  
|              |  | Quarter |       |                          |      |   | 2012 and |      |  |  
|              |  | 2007    |       |                          | 2008 |   |          | 2009 |  |   | 2010    |  |  | 2011 |         |  | Thereafter |   |         | Total | 
|              |  |         |       |                          |      |   |          |      |  |   |         |  |  |      |         |  |            |   |         |       | 
|              |  |         |       | (In millions)            |     
|FHLB advances |  | $       | 201.0 |                          |      | $ | 1,107.0  |      |  | $ | 2,452.0 |  |  | $    | 1,321.0 |  |            | $ | 1,078.0 |       |  | $ | 3,854.0 |  |  | $ | 10,013.0 | 





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



49



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##### Table of Contents











Liquidity and Capital
Management Quarter Ended September 30, 2007
Highlights








| |   |                                                                                                                                                                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Eliminated exposure to extendable commercial paper conduit
    liquidity due to market dislocation by moving collateral to
    alternative financing sources including our Mortgage Asset
    Lending Agreement (MALA)/ Receivables Lending
    Agreement (RLA) facilities and repurchase agreements;                                                          
|
| |  | Secured $2.0 billion of new committed repurchase agreements
    to fund conforming mortgage production;                                                                                                                                                                                                                                                            
|
| |  | Executed the sale of substantially all of the assets and
    operations comprising our healthcare finance business to GMAC
    Commercial Finance LLC, for $900.5 million;                                                                                                                                                                                         
|
| |  | Received capital contributions totaling $1.0 billion from
    GMAC in the third quarter of 2007. GMAC also contributed
    $256.0 million of capital to GMAC Bank isolated to its auto
    division. In the full year 2007, we have received
    $2.0 billion in capital contributions from GMAC, excluding
    the contribution to the auto division of GMAC Bank;
|
| |  | Increased funding at GMAC Bank, which offers a competitive cost
    of funding, in anticipation of increasing our loan production
    through GMAC Bank;                                                                                                                                                                                                           
|
| |  | Renewed in early October 2007, the United Kingdoms largest
    warehouse funding facility of $4.7 billion, which was
    scheduled to mature in October 2007; and                                                                                                                                                                                                 
|
| |  | Our parent, GMAC, entered into an agreement with a financial
    service lender, effective September 6, 2007, pursuant to
    which the entity has committed to provide up to
    $21.4 billion in various asset-backed funding facilities
    (the Facilities) through September 2008. A total of
    $14.4 billion will become                                 

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##### Table of Contents



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | available for immediate funding upon execution of the
    Facilities, with the additional $7.0 billion becoming
    available if and when the facility is syndicated to other
    lenders. Up to $8.0 billion of the Facilities, depending on
    GMACs usage of the facilities, can be made available to us
    to fund mortgage assets. As of September 30, 2007, we had a
    net increase in secured committed funding capacity for our
    mortgage servicing rights of $950.0 million from our new
    Facilities.







| |           
| | ----------
| | Borrowings

|                                                                   |                                      |                               |           |          |              |   |           |          |           | 
|------------------------------------------------------------------ | ------------------------------------ | ----------------------------- | --------- | -------- | ------------ | - | --------- | -------- | --------- | 
|                                                                   |                                      | Outstanding as of             |          
|                                                                   |                                      |                               |          
|                                                                   |                                      | September 30,                 |           |          | December 31, |  
|                                                                   |                                      | 2007                          |           |          | 2006         |  
|                                                                   |                                      |                               |           |          |              |  
|                                                                   |                                      | (In millions)                 |          
|Collateralized borrowings in securitization trusts 
    long-term |                                      | $                             | 38,223.9  |          |              | $ | 53,299.5  |         
|                                                                   | Senior unsecured notes  long-term   |                               |           | 15,518.8 |              |   |           | 12,408.8 |          
|                                                                   | Subordinated unsecured note          |                               |           | 1,000.0  |              |   |           | 1,000.0  |          
|                                                                   | Term loans and revolvers  long-term |                               |           | 1,750.0  |              |   |           | 1,750.0  |          
|                                                                   | Bank lines  short-term              |                               |           | 696.2    |              |   |           | 756.0    |          
|                                                                   | Bank lines  long-term               |                               |           | 32.0     |              |   |           | 21.8     |          
|                                                                   | Other unsecured  short-term         |                               |           | 370.0    |              |   |           | 392.7    |          
|                                                                   | Other unsecured  long-term          |                               |           | 710.2    |              |   |           | 643.6    |          
|                                                                   |                                      |                               |           |          |              |  
|Subtotal unsecured borrowings                                      |                                      |                               | 20,077.2  |          |              |   | 16,972.9  |         
|                                                                   |                                      |                               |           |          |              |  
|                                                                   | Secured  short-term                 |                               |           | 17,475.8 |              |   |           | 29,065.9 |          
|                                                                   | Secured  long-term                  |                               |           | 2,091.1  |              |   |           | 6,562.6  |          
|                                                                   | FHLB  long-term                     |                               |           | 10,013.0 |              |   |           | 7,279.0  |          
|                                                                   |                                      |                               |           |          |              |  
|Subtotal secured borrowings                                        |                                      |                               | 29,579.9  |          |              |   | 42,907.5  |         
|                                                                   |                                      |                               |           |          |              |  
|                                                                   |                                      | Total borrowings              |           |          | 87,881.0     |   |           |          | 113,179.9 | 
|Bank deposits                                                      |                                      |                               | 14,488.3  |          |              |   | 9,851.0   |         
|                                                                   |                                      |                               |           |          |              |  
|                                                                   |                                      | Total borrowings and deposits |           |          | 102,369.3    |   |           |          | 123,030.9 | 
|Off-balance sheet financings                                       |                                      |                               | 137,911.1 |          |              |   | 119,295.8 |         
|                                                                   |                                      |                               |           |          |              |  
|                                                                   |                                      | Total                         |           | $        | 240,280.4    |   |           | $        | 242,326.7 | 
|                                                                   |                                      |                               |           |          |              |  



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



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



51



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10-K




| |                                         
| | ----------------------------------------
| | Unsecured and Secured Funding Facilities



|                             |  |                          |          |  |                         |   |          |       |  |   |           |  |  |             |          |  |       |   |          |  |  |   |           | 
|---------------------------- |  | ------------------------ | -------- |  | ----------------------- | - | -------- | ----- |  | - | --------- |  |  | ----------- | -------- |  | ----- | - | -------- |  |  | - | --------- | 
|                             |  | As of September 30, 2007 |          |  | As of December 31, 2006 |  
|                             |  |                          |          |  |                         |  
|                             |  | Committed                |          |  | Uncommitted             |   |          | Total |  |   | Committed |  |  | Uncommitted |          |  | Total |  
|                             |  |                          |          |  |                         |   |          |       |  |   |           |  |  |             |          |  |       |  
|                             |  | (In millions)            |         
|Unsecured funding facilities |  | $                        | 3,927.2  |  |                         | $ | 1,049.9  |       |  | $ | 4,977.1   |  |  | $           | 3,860.8  |  |       | $ | 1,770.2  |  |  | $ | 5,631.0   | 
|Secured funding facilities   |  |                          | 34,112.2 |  |                         |   | 98,029.8 |       |  |   | 132,142.0 |  |  |             | 29,371.1 |  |       |   | 73,276.7 |  |  |   | 102,647.8 | 





Unsecured Funding Facilities




|                                        |       |                                |         |         |                         |   |       |          |  |   |             |         |  |          |         |         |          |   |       |         |  |   |         |         | 
|--------------------------------------- | ----- | ------------------------------ | ------- | ------- | ----------------------- | - | ----- | -------- |  | - | ----------- | ------- |  | -------- | ------- | ------- | -------- | - | ----- | ------- |  | - | ------- | ------- | 
|                                        |       | Unsecured Committed Facilities |        
|                                        |       |                                |        
|                                        |       | As of September 30, 2007       |         |         | As of December 31, 2006 |  
|                                        |       |                                |         |         |                         |  
|                                        |       |                                |         | Unused  |                         |   | Total |          |  |   |             | Unused  |  |          | Total   |        
|                                        |       | Outstanding                    |         |         | Capacity                |   |       | Capacity |  |   | Outstanding |         |  | Capacity |         |         | Capacity |  
|                                        |       |                                |         |         |                         |   |       |          |  |   |             |         |  |          |         |         |          |  
|                                        |       | (In millions)                  |        
|Syndicated bank credit facilities       |       | $                              |        |         |                         | $ | 875.0 |          |  | $ | 875.0       |         |  | $        |        |         |          | $ | 875.0 |         |  | $ | 875.0   |        
|364-day bank credit facilities revolver |       |                                |        |         |                         |   | 875.0 |          |  |   | 875.0       |         |  |          |        |         |          |   | 875.0 |         |  |   | 875.0   |        
|International bank lines                |       |                                | 367.2   |         |                         |   | 60.0  |          |  |   | 427.2       |         |  |          | 216.3   |         |          |   | 144.5 |         |  |   | 360.8   |        
|Bank term loan                          |       |                                | 1,750.0 |         |                         |   |      |          |  |   | 1,750.0     |         |  |          | 1,750.0 |         |          |   |      |         |  |   | 1,750.0 |        
|                                        |       |                                |         |         |                         |   |       |          |  |   |             |         |  |          |         |         |          |  
|                                        | Total |                                | $       | 2,117.2 |                         |   | $     | 1,810.0  |  |   | $           | 3,927.2 |  |          | $       | 1,966.3 |          |   | $     | 1,894.5 |  |   | $       | 3,860.8 | 
|                                        |       |                                |         |         |                         |   |       |          |  |   |             |         |  |          |         |         |          |  

364-day


52



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##### Table of Contents







|                               |       |                                  |       |        |                         |   |       |          |  |   |             |         |  |          |       |       |          |   |       |       |  |   |       |         | 
|------------------------------ | ----- | -------------------------------- | ----- | ------ | ----------------------- | - | ----- | -------- |  | - | ----------- | ------- |  | -------- | ----- | ----- | -------- | - | ----- | ----- |  | - | ----- | ------- | 
|                               |       | Unsecured Uncommitted Facilities |      
|                               |       |                                  |      
|                               |       | As of September 30, 2007         |       |        | As of December 31, 2006 |  
|                               |       |                                  |       |        |                         |  
|                               |       |                                  |       | Unused |                         |   | Total |          |  |   |             | Unused  |  |          | Total |      
|                               |       | Outstanding                      |       |        | Capacity                |   |       | Capacity |  |   | Outstanding |         |  | Capacity |       |       | Capacity |  
|                               |       |                                  |       |        |                         |   |       |          |  |   |             |         |  |          |       |       |          |  
|                               |       | (In millions)                    |      
|Lines of credit                |       | $                                | 261.1 |        |                         | $ | 52.6  |          |  | $ | 313.7       |         |  | $        | 161.8 |       |          | $ | 125.4 |       |  | $ | 287.2 |        
|International commercial paper |       |                                  | 314.1 |        |                         |   | 144.0 |          |  |   | 458.1       |         |  |          | 186.2 |       |          |   | 90.6  |       |  |   | 276.8 |        
|GMAC Bank Fed Funds            |       |                                  | 50.0  |        |                         |   | 115.0 |          |  |   | 165.0       |         |  |          |      |       |          |   | 506.0 |       |  |   | 506.0 |        
|Other                          |       |                                  | 111.1 |        |                         |   | 2.0   |          |  |   | 113.1       |         |  |          | 606.2 |       |          |   | 94.0  |       |  |   | 700.2 |        
|                               |       |                                  |       |        |                         |   |       |          |  |   |             |         |  |          |       |       |          |  
|                               | Total |                                  | $     | 736.3  |                         |   | $     | 313.6    |  |   | $           | 1,049.9 |  |          | $     | 954.2 |          |   | $     | 816.0 |  |   | $     | 1,770.2 | 
|                               |       |                                  |       |        |                         |   |       |          |  |   |             |         |  |          |       |       |          |  



non-agency






| |                           
| | --------------------------
| | Secured Funding Facilities



53



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##### Table of Contents





|                                                     |       |                              |         |          |                         |   |         |          |  |   |             |          |  |          |         |          |          |   |         |         |  |   |          |          | 
|---------------------------------------------------- | ----- | ---------------------------- | ------- | -------- | ----------------------- | - | ------- | -------- |  | - | ----------- | -------- |  | -------- | ------- | -------- | -------- | - | ------- | ------- |  | - | -------- | -------- | 
|                                                     |       | Secured Committed Facilities |        
|                                                     |       |                              |        
|                                                     |       | As of September 30, 2007     |         |          | As of December 31, 2006 |  
|                                                     |       |                              |         |          |                         |  
|                                                     |       |                              |         | Unused   |                         |   | Total   |          |  |   |             | Unused   |  |          | Total   |         
|                                                     |       | Outstanding                  |         |          | Capacity                |   |         | Capacity |  |   | Outstanding |          |  | Capacity |         |          | Capacity |  
|                                                     |       |                              |         |          |                         |   |         |          |  |   |             |          |  |          |         |          |          |  
|                                                     |       | (In millions)                |        
|Mortgage Interest Networking Trust (MINT)            |       | $                            |        |          |                         | $ |        |          |  | $ |            |          |  | $        |        |          |          | $ | 5.0     |         |  | $ | 5.0      |         
|Repurchase agreements                                |       |                              | 5,219.7 |          |                         |   | 4,663.9 |          |  |   | 9,883.6     |          |  |          | 4,950.8 |          |          |   | 1,704.3 |         |  |   | 6,655.1  |         
|Receivables Lending Agreement (RLA)                  |       |                              | 800.0   |          |                         |   | 3,507.7 |          |  |   | 4,307.7     |          |  |          | 5,250.0 |          |          |   | 322.8   |         |  |   | 5,572.8  |         
|Mortgage Asset Lending Agreement (MALA)              |       |                              | 630.0   |          |                         |   | 3,741.3 |          |  |   | 4,371.3     |          |  |          | 1,120.0 |          |          |   | 1,836.3 |         |  |   | 2,956.3  |         
|Bank facilities for construction lending receivables |       |                              | 1,894.6 |          |                         |   | 8.1     |          |  |   | 1,902.7     |          |  |          | 1,700.0 |          |          |   |        |         |  |   | 1,700.0  |         
|Bank facility for mortgage servicing rights          |       |                              | 1,830.0 |          |                         |   | 420.0   |          |  |   | 2,250.0     |          |  |          | 1,275.0 |          |          |   | 25.0    |         |  |   | 1,300.0  |         
|Other                                                |       |                              | 6,898.3 |          |                         |   | 4,498.6 |          |  |   | 11,396.9    |          |  |          | 7,223.3 |          |          |   | 3,958.6 |         |  |   | 11,181.9 |         
|                                                     |       |                              |         |          |                         |   |         |          |  |   |             |          |  |          |         |          |          |  
|                                                     | Total |                              | $       | 17,272.6 |                         |   | $       | 16,839.6 |  |   | $           | 34,112.2 |  |          | $       | 21,519.1 |          |   | $       | 7,852.0 |  |   | $        | 29,371.1 | 
|                                                     |       |                              |         |          |                         |   |         |          |  |   |             |          |  |          |         |          |          |  

MINT: 2003-2


Repurchase agreements:


RLA:


MALA:


Bank facilities:


Other:


54



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##### Table of Contents






Bilateral secured facility:




|                                          |                               |                                |          |          |                         |   |          |          |  |   |             |          |  |          |         |          |          |   |          |          |  |   |          |          | 
|----------------------------------------- | ----------------------------- | ------------------------------ | -------- | -------- | ----------------------- | - | -------- | -------- |  | - | ----------- | -------- |  | -------- | ------- | -------- | -------- | - | -------- | -------- |  | - | -------- | -------- | 
|                                          |                               | Secured Uncommitted Facilities |         
|                                          |                               |                                |         
|                                          |                               | As of September 30, 2007       |          |          | As of December 31, 2006 |  
|                                          |                               |                                |          |          |                         |  
|                                          |                               |                                |          | Unused   |                         |   | Total    |          |  |   |             | Unused   |  |          | Total   |         
|                                          |                               | Outstanding                    |          |          | Capacity                |   |          | Capacity |  |   | Outstanding |          |  | Capacity |         |          | Capacity |  
|                                          |                               |                                |          |          |                         |   |          |          |  |   |             |          |  |          |         |          |          |  
|                                          |                               | (In millions)                  |         
|Mortgage Interest Networking Trust (MINT) |                               | $                              |         |          |                         | $ | 25,000.0 |          |  | $ | 25,000.0    |          |  | $        | 1,402.9 |          |          | $ | 23,592.1 |          |  | $ | 24,995.0 |         
|MINT I, LLC                               |                               |                                |         |          |                         |   | 25,000.0 |          |  |   | 25,000.0    |          |  |          |        |          |          |   |         |          |  |   |         |         
|MINT II, LLC                              |                               |                                |         |          |                         |   | 25,000.0 |          |  |   | 25,000.0    |          |  |          | 5,831.2 |          |          |   | 19,168.8 |          |  |   | 25,000.0 |         
|Repurchase agreements                     |                               |                                | 1,616.1  |          |                         |   | 7,536.5  |          |  |   | 9,152.6     |          |  |          | 6,554.7 |          |          |   | 6,109.1  |          |  |   | 12,663.8 |         
|Other                                     |                               |                                | 678.1    |          |                         |   | 1,001.5  |          |  |   | 1,679.6     |          |  |          | 320.6   |          |          |   | 713.0    |          |  |   | 1,033.6  |         
|                                          |                               |                                |          |          |                         |   |          |          |  |   |             |          |  |          |         |          |          |  
|                                          | Total excluding FHLB advances |                                |          | 2,294.2  |                         |   |          | 83,538.0 |  |   |             | 85,832.2 |  |          |         | 14,109.4 |          |   |          | 49,583.0 |  |   |          | 63,692.4 | 
|FHLB advances                             |                               |                                | 10,013.0 |          |                         |   | 2,184.6  |          |  |   | 12,197.6    |          |  |          | 7,279.0 |          |          |   | 2,305.3  |          |  |   | 9,584.3  |         
|                                          |                               |                                |          |          |                         |   |          |          |  |   |             |          |  |          |         |          |          |  
|                                          | Total                         |                                | $        | 12,307.2 |                         |   | $        | 85,722.6 |  |   | $           | 98,029.8 |  |          | $       | 21,388.4 |          |   | $        | 51,888.3 |  |   | $        | 73,276.7 | 
|                                          |                               |                                |          |          |                         |   |          |          |  |   |             |          |  |          |         |          |          |  

MINT I: MINT I, LLC on-balance


MINT II: MINT II, LLC


55



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FHLB Advances:




|                                        |       |                          |          |          |             |   |          |             |  |       |           |          |  |             |          |          |          |   |          |          |  |   |           |           | 
|--------------------------------------- | ----- | ------------------------ | -------- | -------- | ----------- | - | -------- | ----------- |  | ----- | --------- | -------- |  | ----------- | -------- | -------- | -------- | - | -------- | -------- |  | - | --------- | --------- | 
|                                        |       | As of September 30, 2007 |         
|                                        |       |                          |         
|                                        |       |                          |          | Secured  |             |   | Secured  |             |  | Total |          
|                                        |       | Secured                  |          |          | Secured     |   |          | Total       |  |       | Committed |          |  | Uncommitted |          |          | Secured  |  
|                                        |       | Committed                |          |          | Uncommitted |   |          | Secured     |  |       | Unused    |          |  | Unused      |          |          | Unused   |  
|                                        |       | Outstanding              |          |          | Outstanding |   |          | Outstanding |  |       | Capacity  |          |  | Capacity    |          |          | Capacity |  
|                                        |       |                          |          |          |             |   |          |             |  |       |           |          |  |             |          |          |          |  
|                                        |       | (In millions)            |         
|Mortgage loans and warehouse lending(a) |       | $                        | 12,813.2 |          |             | $ | 12,198.6 |             |  | $     | 25,011.8  |          |  | $           | 16,246.3 |          |          | $ | 85,722.6 |          |  | $ | 101.968.9 |          
|Other lending receivables(b)            |       |                          | 1,894.6  |          |             |   |         |             |  |       | 1,894.6   |          |  |             | 8.1      |          |          |   |         |          |  |   | 8.1       |          
|Mortgage servicing rights(c)            |       |                          | 1,830.0  |          |             |   |         |             |  |       | 1,830.0   |          |  |             | 420.0    |          |          |   |         |          |  |   | 420.0     |          
|Other                                   |       |                          | 734.8    |          |             |   | 108.6    |             |  |       | 843.4     |          |  |             | 165.2    |          |          |   |         |          |  |   | 165.2     |          
|                                        |       |                          |          |          |             |   |          |             |  |       |           |          |  |             |          |          |          |  
|                                        | Total |                          | $        | 17,272.6 |             |   | $        | 12,307.2    |  |       | $         | 29,579.8 |  |             | $        | 16,839.6 |          |   | $        | 85,722.6 |  |   | $         | 102,562.2 | 
|                                        |       |                          |          |          |             |   |          |             |  |       |           |          |  |             |          |          |          |  

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






|    |                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Mortgage loans and warehouse lending is comprised of MINT, MINT
    I, MINT II, MALA, RLA, repurchasing agreements, the Facilities,
    and FHLB advances.
|   
|(b) | Facilities that fund construction and commercial business
    lending receivables.                                                                        
|   
|(c) | Facilities to fund mortgage serving rights.                                                                                                               

56



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##### Table of Contents



International
Funding Facilities


on-balance


|                                     |  |                          |         |        |                         |   |         |          |  |   |             |        |  |          |         |  |          |   |         |  |  |   |          | 
|------------------------------------ |  | ------------------------ | ------- | ------ | ----------------------- | - | ------- | -------- |  | - | ----------- | ------ |  | -------- | ------- |  | -------- | - | ------- |  |  | - | -------- | 
|                                     |  | International Facilities |        
|                                     |  |                          |        
|                                     |  | As of September 30, 2007 |         |        | As of December 31, 2006 |  
|                                     |  |                          |         |        |                         |  
|                                     |  |                          |         | Unused |                         |   | Total   |          |  |   |             | Unused |  |          | Total   | 
|                                     |  | Outstanding              |         |        | Capacity                |   |         | Capacity |  |   | Outstanding |        |  | Capacity |         |  | Capacity |  
|                                     |  |                          |         |        |                         |   |         |          |  |   |             |        |  |          |         |  |          |  
|                                     |  | (In millions)            |        
|Committed international facilities   |  | $                        | 7,373.3 |        |                         | $ | 4,462.3 |          |  | $ | 11,835.6    |        |  | $        | 6,815.3 |  |          | $ | 4,486.4 |  |  | $ | 11,301.7 | 
|Uncommitted international facilities |  |                          | 1,253.3 |        |                         |   | 1,198.1 |          |  |   | 2,451.4     |        |  |          | 593.4   |  |          |   | 978.0   |  |  |   | 1,571.4  | 



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





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







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Walnut Grove Funding is a secured aggregation facility that
    funds home equity loans, home equity lines of credit, high
    loan-to-value mortgage
    loans and certain non-conforming fixed rate mortgage loans
    through the issuance of asset-backed commercial paper. Walnut
    Grove Funding provided $303.3 million of funding as of
    September 30, 2007 and $275.4 million as of
    December 31, 2006, and was permitted to finance a maximum
    of $1.0 billion as of September 30, 2007 and
    $900.0 million as of December 31, 2006. During the
    fourth quarter of 2007, we intend to terminate this program,
    causing a reduction of liquidity to prior levels.
|
| |  | Horsham Funding is a facility that funds defaulted government
    insured or guaranteed residential mortgage loans repurchased
    through the issuance of asset-backed commercial paper. Horsham
    Funding provided $138.2 million of funding as of
    September 30, 2007 and $102.4 million as of
    December 31, 2006, and was permitted to finance a maximum
    amount of $200.0 million as of September 30, 2007 and
    December 31, 2006. The facility is scheduled to mature in
    the fourth quarter of 2007 and it is not expected to be renewed.                                                                                                                             

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



|              |  |            |  |             |  |                        
|------------- |  | ---------- |  | ----------- |  | -----------------------
|              |  | Commercial |  |             |  |                        
|Rating Agency |  | Paper      |  | Senior Debt |  | Outlook                
|              |  |            |  |             |  |                        
|Fitch         |  | B          |  | BB+         |  | Under review- down     
|Moodys       |  | NP         |  | Ba3         |  | Negative               
|S&P           |  | B          |  | BB+         |  | Negative               
|DBRS          |  | R-4        |  | BB          |  | Watch ratings- negative







Recently Issued Accounting Standards









|        |                                                                
|------- | ---------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk.





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|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |       |      |      |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------------------------- | ----------------------------------------------------------- | ------ | ----- | -- | ---- | ---- | ---- | -- | ---- | ---- | ---- | --- | ---- | ----- | ---- | ---- | -
|                                                                                                  |                                                        | Change in Fair Value                      |                                                            
|                                                                                                  |                                                        | as of                                     |                                                            
|                                                                                                  |                                                        | September 30, 2007                        |                                                            
|                                                                                                  |                                                        |                                           |                                                            
|Change in Interest Rate (basis points)                                                            |                                                        | -100                                      |                                                             |        | -50   |    |      | +50  |      |    | +100 |     
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  |                                                        | (In millions)                             |                                                            
|Mortgage serving rights and other financial instruments:                                          |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |      
|                                                                                                  | Mortgage servicing rights and other retained interests |                                           | $                                                           | (1,846 | )     |    | $    | (874 | )    |    | $    | 667  |      |     | $    | 1,145 |     
|                                                                                                  | Impact of servicing hedge:                             |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |       |     
|                                                                                                  |                                                        | Swap-based                                |                                                             |        | 1,297 |    |      |      | 592  |    |      |      | (480 | )   |      |       | (870 | )   
|                                                                                                  |                                                        | Treasury-based                            |                                                             |        | 3     |    |      |      | 2    |    |      |      | (2   | )   |      |       | (3   | )   
|                                                                                                  |                                                        | Others                                    |                                                             |        | 574   |    |      |      | 284  |    |      |      | (270 | )   |      |       | (522 | )   
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  |                                                        |                                           | Mortgage servicing rights and other retained interests, net |        |       | 28 |      |      |      | 4  |      |      |      | (85 | )    |       |      | (250 | )
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  | Committed pipeline                                     |                                           |                                                             | 120    |       |    |      | 77   |      |    |      | (122 | )    |     |      | (285  | )   
|                                                                                                  | Mortgage loan inventory                                |                                           |                                                             | 226    |       |    |      | 122  |      |    |      | (139 | )    |     |      | (292  | )   
|                                                                                                  | Impact of associated derivative instruments:           |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |       |     
|                                                                                                  |                                                        | Mortgage-based                            |                                                             |        | (180  | )  |      |      | (105 | )  |      |      | 137  |     |      |       | 300  |     
|                                                                                                  |                                                        | Eurodollar-based                          |                                                             |        | (14   | )  |      |      | (7   | )  |      |      | 7    |     |      |       | 14   |     
|                                                                                                  |                                                        | Others                                    |                                                             |        | (68   | )  |      |      | (36  | )  |      |      | 41   |     |      |       | 87   |     
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  |                                                        |                                           | Committed pipeline and mortgage loan inventory, net         |        |       | 84 |      |      |      | 51 |      |      |      | (76 | )    |       |      | (176 | )
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Net change in fair value related to other businesses                                              |                                                        |                                           | 7                                                           |        |       |    | 3    |      |      |    | (2   | )    |      |     | (1   | )    
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|GMAC Bank:                                                                                        |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |      
|                                                                                                  | Securities portfolio                                   |                                           |                                                             | 15     |       |    |      | 7    |      |    |      | (7   | )    |     |      | (14   | )   
|                                                                                                  | Mortgage loans                                         |                                           |                                                             | 294    |       |    |      | 160  |      |    |      | (177 | )    |     |      | (367  | )   
|                                                                                                  | Deposit liabilities                                    |                                           |                                                             | (11    | )     |    |      | (5   | )    |    |      | 5    |      |     |      | 11    |     
|                                                                                                  | Federal Home Loan Bank advances                        |                                           |                                                             | (246   | )     |    |      | (124 | )    |    |      | 132  |      |     |      | 270   |     
|                                                                                                  | Other liabilities                                      |                                           |                                                             | (11    | )     |    |      | (5   | )    |    |      | 5    |      |     |      | 11    |     
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  |                                                        | GMAC Bank, net                            |                                                             |        | 41    |    |      |      | 33   |    |      |      | (42  | )   |      |       | (89  | )   
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Notes payable and capital securities                                                              |                                                        |                                           | (288                                                        | )      |       |    | (143 | )    |      |    | 139  |      |      |     | 276  |      
|Impact of associated derivative instruments:                                                      |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |      |      |     |      |      
|                                                                                                  |                                                        | Swap-based                                |                                                             |        | 294   |    |      |      | 145  |    |      |      | (141 | )   |      |       | (279 | )   
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|                                                                                                  |                                                        | Notes payable and capital securities, net |                                                             |        | 6     |    |      |      | 2    |    |      |      | (2   | )   |      |       | (3   | )   
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Insurance company investment portfolios                                                           |                                                        |                                           | 2                                                           |        |       |    | 1    |      |      |    | (1   | )    |      |     | (3   | )    
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Net change in fair value related to mortgage servicing rights
    and other financial instruments |                                                        | $                                         | 168                                                         |        |       | $  | 94   |      |      | $  | (208 | )    |      | $   | (522 | )    
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Net change in fair value related to broker-dealer trading
    securities                          |                                                        | $                                         | 3                                                           |        |       | $  | 2    |      |      | $  | (1   | )    |      | $   | (2   | )    
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     
|Net change in fair value related to GMAC Auto Bank                                                |                                                        | $                                         | 37                                                          |        |       | $  | 19   |      |      | $  | (18  | )    |      | $   | (36  | )    
|                                                                                                  |                                                        |                                           |                                                             |        |       |    |      |      |      |    |      |     

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|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |      |      |     |      |      |      |     |  
|------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ----------------------------------------- | ----------------------------------------------------------- | ------ | ---- | ---- | ---- | ---- | ---- | --- | ---- | ---- | ---- | --- | ---- | ---- | ---- | --- | -
|                                                                                                  |                                                        | Change in Fair Value                      |                                                            
|                                                                                                  |                                                        | as of September 30, 2006                  |                                                            
|                                                                                                  |                                                        |                                           |                                                            
|Change 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 |                                           | $                                                           | (1,212 | )    |      | $    | (540 | )    |     | $    | 380  |      |     | $    | 617  |     
|                                                                                                  | Impact of servicing hedge:                             |                                           |                                                             |        |      |      |      |      |      |     |      |      |      |     |      |      |     
|                                                                                                  |                                                        | Swap-based                                |                                                             |        | 460  |      |      |      | 195  |     |      |      | (125 | )   |      |      | (196 | )  
|                                                                                                  |                                                        | Treasury-based                            |                                                             |        | 115  |      |      |      | 56   |     |      |      | (54  | )   |      |      | (105 | )  
|                                                                                                  |                                                        | Others                                    |                                                             |        | 528  |      |      |      | 242  |     |      |      | (205 | )   |      |      | (384 | )  
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|                                                                                                  |                                                        |                                           | Mortgage servicing rights and other retained interests, net |        |      | (109 | )    |      |      | (47 | )    |      |      | (4  | )    |      |      | (68 | )
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|                                                                                                  | Committed pipeline                                     |                                           |                                                             | 34     |      |      |      | 23   |      |     |      | (46  | )    |     |      | (122 | )   
|                                                                                                  | Mortgage loan inventory                                |                                           |                                                             | 273    |      |      |      | 146  |      |     |      | (174 | )    |     |      | (376 | )   
|                                                                                                  | Impact of associated derivative instruments:           |                                           |                                                             |        |      |      |      |      |      |     |      |      |      |     |      |      |     
|                                                                                                  |                                                        | Mortgage-based                            |                                                             |        | (77  | )    |      |      | (49  | )   |      |      | 78   |     |      |      | 187  |    
|                                                                                                  |                                                        | Eurodollar-based                          |                                                             |        | (11  | )    |      |      | (6   | )   |      |      | 6    |     |      |      | 11   |    
|                                                                                                  |                                                        | Others                                    |                                                             |        | (194 | )    |      |      | (100 | )   |      |      | 124  |     |      |      | 240  |    
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|                                                                                                  |                                                        |                                           | Committed pipeline and mortgage loan inventory, net         |        |      | 25   |      |      |      | 14  |      |      |      | (12 | )    |      |      | (60 | )
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|Net change in fair value related to other businesses                                              |                                                        |                                           | 5                                                           |        |      |      | 3    |      |      |     | (3   | )    |      |     | (7   | )   
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|GMAC Bank:                                                                                        |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |      |      |     |      |     
|                                                                                                  | Mortgage loans                                         |                                           |                                                             | 173    |      |      |      | 98   |      |     |      | (114 | )    |     |      | (237 | )   
|                                                                                                  | Deposit liabilities                                    |                                           |                                                             | (11    | )    |      |      | (5   | )    |     |      | 5    |      |     |      | 11   |     
|                                                                                                  | Federal Home Loan Bank advances                        |                                           |                                                             | (151   | )    |      |      | (78  | )    |     |      | 82   |      |     |      | 166  |     
|                                                                                                  | Other liabilities                                      |                                           |                                                             | (22    | )    |      |      | (11  | )    |     |      | 11   |      |     |      | 22   |     
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|                                                                                                  |                                                        | GMAC Bank, net                            |                                                             |        | (11  | )    |      |      | 4    |     |      |      | (16  | )   |      |      | (38  | )  
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|Notes payable and capital securities                                                              |                                                        |                                           | (287                                                        | )      |      |      | (142 | )    |      |     | 138  |      |      |     | 272  |     
|Impact of associated derivative instruments:                                                      |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |      |      |     |      |     
|                                                                                                  |                                                        | Swap-based                                |                                                             |        | 331  |      |      |      | 163  |     |      |      | (160 | )   |      |      | (315 | )  
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|                                                                                                  |                                                        | Notes payable and capital securities, net |                                                             |        | 44   |      |      |      | 21   |     |      |      | (22  | )   |      |      | (43  | )  
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|Insurance company investment portfolios                                                           |                                                        |                                           | 3                                                           |        |      |      | 2    |      |      |     | (2   | )    |      |     | (4   | )   
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|Net change in fair value related to mortgage servicing rights
    and other financial instruments |                                                        | $                                         | (43                                                         | )      |      | $    | (3   | )    |      | $   | (59  | )    |      | $   | (220 | )   
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     
|Net change in fair value related to broker-dealer trading
    securities                          |                                                        | $                                         | (3                                                          | )      |      | $    | (1   | )    |      | $   | 1    |      |      | $   | 2    |     
|                                                                                                  |                                                        |                                           |                                                             |        |      |      |      |      |      |     |      |     



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Item 4.  Controls and Procedures


13a-15(e)






13a-15(f)




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PART II  OTHER INFORMATION





Item 1.  Legal Proceedings.




Kessler.


Santiago.


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Murray. Safeco Ins. Co., et al. v.
Burr, et al


Parthiban. Murray Murray.


Mitchell.








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Federal Trade Commission.







|         |             
|-------- | ------------
|Item 1A. | Risk Factors



Risks related to our business




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









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







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





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



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| |   |                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                                 







| |                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have concluded that a material weakness exists in the
    design and operation of our internal control as of
    September 30, 2007, which, if our remediation efforts fail,
    could result in material misstatements in our financial
    statements in future periods.





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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.




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SIGNATURES






| |                                        
| | ---------------------------------------
| | Residential Capital, LLC               
| | (Registrant)                           
|
| | /s/ Sanjiv Khattri                     
| |                                        
| | Sanjiv Khattri                         
| | Chief Financial Officer                
|
| | /s/ Linda K. Zukauckas                 
| |                                        
| | Linda K. Zukauckas                     
| | Chief Accounting Officer and Controller

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INDEX OF EXHIBITS


|        |      |  |             |                                                                                                                                                             
|------- | ---- |  | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  | Description
|        |      |  |            
|        | 10.1 |  |             | Asset Purchase Agreement between Residential Funding Company,
    LLC, Equity Investments II, LLC and GMAC Commercial Finance LLC,
    dated August 27, 2007
|        | 12.1 |  |             | Computation of ratio of earnings to fixed charges                                                                                                           
|        | 31.1 |  |             | Certification of Principal Executive Officer pursuant to
    Rule 13a-14(a)/15d-14(a)                                                                       
|        | 31.2 |  |             | Certification of Principal Financial Officer pursuant to
    Rule 13a-14(a)/15d-14(a)                                                                       



| |    |  |  |                                                                                                                    
| | -- |  |  | -------------------------------------------------------------------------------------------------------------------
| | 32 |  |  | Certification of Principal Executive Officer and Principal
    Financial Officer pursuant to 18 U.S.C. Section 1350

69