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GMAC sells home financing unit to Brookfield

The Cerberus-owned home and auto lender has agreed to sell its home services division to the Toronto-based investment firm Brookfield Asset Management.

Cerberus Capital Management portfolio company GMAC has agreed to sell its primary home financing unit to Canadian investment firm Brookfield Asset Management.

The financial terms of the deal were not disclosed. Brookfield will acquire GMAC Home Services, a division within GMAC which provides global relocation, real estate franchising and brokerage and home financing services in the US, Europe and Asia.

Toronto-based Brookfield said in a statement that the deal will likely be completed in the fourth quarter. The physical asset-focused firm boasts roughly $95 billion in assets under management.

In 2006, a Cerberus-led consortium purchased GMAC for $14 billion, with $6 billion coming from the New York-based firm’s own funds. The mortgage and auto lender, formerly the financing wing of General Motors, has been severely hit by the subprime mortgage crisis and general credit market turbulence.

Residential Capital, GMAC’s primary mortgage lending affiliate and the parent organisation of GMAC Home Services, said earlier this year GMAC and Cerberus had agreed to meet a $1.43 billion shortfall confronting the company.