GMAC, the US financial services group, is in talks about selling assets owned by its mortgage business, Residential Capital, after it reported a $724 million (368.5 million) loss for the fourth quarter.

GMAC blamed both the US sub-prime crisis and recent turbulence in global financial markets for the steep loss after making a $1 billion profit in the same quarter last year. Although the result was an improvement on the $1.6 billion loss reported in the third quarter in 2007.

Over 2007, GMAC lost $2.33 billion, compared with a $2.13 billion profit in 2006.

The company said today it is in confidential talks with various parties about some of the businesses at Residential Capital, which posted a $921 million loss in the fourth quarter and $4.3 billion for 2007.

GMAC said it has no plans to inject fresh capital into the unit which has lost money for five quarters in a row.

General Motors sold a majority stake in GMAC to a consortium led by Cerberus Capital Management in 2006 but still holds a 49 per cent interest in the company.

Cerberus, a one-time suitor of Northern Rock, had planned to merge Northern Rock with ResCap if its bid had been successful.

The finance group has hired advisers to look at selling off parts of the ResCap business as part of a strategic review.

“While market conditions remain uncertain, GMAC has taken aggressive actions in 2007 across all its businesses in an effort to mitigate future risk, rationalise the cost structure and position the company for the growth,” the group said.

During the quarter, GMAC booked a gain of $563 million on the repurchase and retirement of ResCap debt, a gain of $483 million from the sale of residual cashflows and the deconsolidation of some on-balance sheet securitisation structures while taking a $131 million restructuring charge. This compared with one-off gains of $1.36 billion in the fourth quarter of 2006.

Moody’s Investors Service cut its ratings on GMAC following the announcement.

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