With customers falling behind on home and car payments, finance company GMAC, of which General Motors owns 49 percent, reported a fourth quarter loss of $724 million on Tuesday, February 5.

A year ago the company posted a profit of $1.02 billion, but while the current figures are disturbing and fuel growing fears of recession in the American economy, they are still up from the third quarter loss of $1.6 billion.

Chief Financial Officer for GMAC, Robert Hull, quoted in a Reuters article said, "We've taken painful and appropriate impairments and reserves throughout the year to set things right. We know (2008) will be another challenging year for us, and may call for further agressive tactics."

The reported losses include those run up by Residential Capital LLC, the mortgage unit of GMAC, now in its fifth consecutive quarter of losses. GMAC's earnings for auto finance fell 77 percent to $137 million with the company's insurance earnings down a staggering 91 percent to $68 million.

The reported numbers will have further consequences when General Motors reports its own earnings on February 12 and when Cerberus Capital Management LP tallies its figures. Cerberus, which owns Chrysler, was the leader of a group that bought 51 percent of GMAC in 2006 from General Motors.

GMAC may sell all or part of its mortage unit in response to the losses and the company has been downgraded by Moody's Investors Service.