In May, GMAC changed its bank's name to Ally Bank--as in friend, or confidante.
The consortium can call off the GMAC deal if GM's debt sinks below triple-C.
But in an interview last month, GMAC Chief Executive Eric Feldstein insisted the opposite was true.
The firm has deposed alleged robo-signers at three other lenders or mortgage-serving companies besides GMAC.
"Do not sign unless you have that comfort level, " a GMAC memo then advised employees.
PRB) is down about 0.5%, and Gmac Capital Trust I 8.125 Fixe ( NYSE: ALLY.
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Chrysler's owner, private equity firm Cerberus Capital Management, also owns 51% of GM's finance arm, GMAC.
Higher interest rates and a succession of credit rating downgrades have increased GMAC's cost of borrowing.
GMAC's problems relate to its subprime mortgage lending, rather than defaults on car loans.
The strings: GMAC had to convert 75% of its debt to equity by last Friday at midnight.
GMAC, which was spun off earlier from GM, also cut way back on new loans and leases.
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Some others in need of moderate improvements to their mortgage services were Wells Fargo, Citi and GMAC.
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Since the study was published the situation had got worse rather than better, a GMAC spokesman said recently.
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The president of GMAC, Dave Wilson, is one of those who thinks the MBA may have to adapt.
Without government assistance, GMAC, which provides both vehicle and mortgage financing, was in jeopardy of filing for bankruptcy.
This would have spelled further trouble for GM, as GMAC helps to finance purchases of most GM vehicles.
Cerberus is also the majority owner of GMAC, the sickly car and home financier once part of General Motors.
That sure beats having GMAC borrow money itself for lending to dealers--two-year GMAC paper is yielding 7.5% to maturity.
As he is fond of saying, GMAC wants to be in the moving business, instead of the storage business.
Cerberus is said to be interested in buying the remaining 49% of GMAC, in exchange for Chrysler's automotive business.
Ford still deserves a premium over GM which imploded in the recession along with its recklessly managed GMAC subsidiary.
General Electric paid nothing in taxes last year due to write-offs associated with losses from its financial services arm, GMAC.
The burden of keeping the money spigots flowing falls on Eric Feldstein, 45, who became GMAC chairman in November 2002.
Bad mortgages in its Rescap subsidiary are dragging down the carmaker's entire operations, even though GM owns only 49% of GMAC.
And two more lenders, GMAC (owned by General Motors and Cerberus) and Accredited Home Lenders, disclosed their own struggles on Tuesday.
"It is unlikely that GMAC's ratings could rise to the investment grade level until GM's profile stabilizes or improves, " Moody's said.
With the bond market becoming too expensive, GMAC has turned to sales of asset-backed securities and whole loans to raise cash.
This was the highest such figure for five years and the second highest overall since GMAC began the surveys in 2000.
Fitch, which has GMAC two rungs below investment grade, said the deal could lift its ratings, although not necessarily to investment grade.
Trouble is brewing in its finance arm, GMAC (nyse: GJM - news - people ), once the cash cow.
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