Finance company GMAC LLC lost $2.52billion in the third quarter, hurt by slumps in the housing andauto markets, and said its Residential Capital LLC mortgageunit may fail.



GMAC has been in the red for five straight quarters, losing$7.9 billion over that time. ResCap lost $1.91 billion in thethird quarter, and has lost $9.1 billion in eight straightquarterly losses.



Despite halting many risky loans and cutting 10,000 jobsover two years, ResCap is struggling to maintain sufficientcapital and liquidity. GMAC excused $197 million of itsobligations in the third quarter, and more in October.



'Absent economic support from GMAC, substantial doubtexists regarding ResCap's ability to continue as a goingconcern,' GMAC said.



Private equity firm Cerberus Capital Management LP owns 51 percent of Detroit-based GMAC, and the automakerGeneral Motors Corp owns 49 percent.



'If GMAC can't provide support that ResCap needs, thenbankruptcy is an option for ResCap,' said Christopher Wolfe, ananalyst at Fitch Ratings. 'GMAC is running out of options.There is a limit to how much support GMAC can provide, and wedon't believe it can provide the support it has historically.'



The fates of ResCap and GMAC also depend on a potentialmerger of GM with Chrysler LLC, also controlled by Cerberus.



GMAC has said it may convert to a bank holding company,letting it tap the U.S. Treasury Department's $700 billionbailout fund, and may refinance much of its debt. It completeda $60 billion restructuring in June.



The company has been the primary lender to GM customers buthas curbed loans to borrowers who do not have good credit. Itsauto finance unit lost $294 million in the quarter, hurt byhigher North American and Latin American credit losses, whileinsurance operations earned $97 million.



GMAC's third-quarter revenue fell 24 percent to $1.72billion. Its year-earlier loss was $1.6 billion.



ResCap was the seventh-largest U.S. mortgage lender fromJanuary to June, the newsletter Inside Mortgage Finance said.