DETROIT — General Motors intends to cull its 8 million auto loan customers looking for home mortgage prospects, the giant auto maker reported Monday.
The General Motors Acceptance Corp. subsidiary will examine the profiles that it keeps on car loan customers and begin picking likely home loan prospects in Michigan.
The outcome of the Michigan program is expected to help GMAC decide on "the form and style" of GMAC's possible mortgage strategy nationwide, GMAC spokesman Charles Newcomer said.
GM became the nation's second-largest mortgage lender last year with the acquisition of Norwest Mortgage of Minneapolis and Colonial Group of Mortgage Cos. of Philadelphia.
A new GM company, GMAC Mortgage Corp., was formed and currently has a portfolio estimated at $21.5 billion, second only to Lomas & Nettleton Financial Co. of Dallas.
'Not an Experiment'
The GMAC mortgage plan comes at a time when many Americans are trying to refinance their homes because of falling home mortgage rates. The program "is a pilot, not an experiment, because we have a feeling it will work," Newcomer said. GMAC is not sure when the program will start, although it probably will be this year. Prospects will be contacted through direct mail, he said.
Mortgage banking is one of several areas that GM is exploring to avoid the severe ups and downs of the auto industry. Its 1984 acquisition of Electronic Data Systems put GM in the data-processing and telecommunications business, and last year it purchased Hughes Aircraft, a leading defense electronics company.
Ford Motor Co. diversified last year by paying nearly $500 million for First Nationwide Financial Corp. and merging the big savings and loan into its Ford Motor Credit subsidiary. Ford President Harold Poling said the auto maker eventually wants to double or triple its non-automotive business, which now accounts for about 5% of Ford's income.
Chrysler Corp. last year purchased a BankAmerica Corp. finance subsidiary for $405 million, paid $125 million for E. F. Hutton Credit Corp. and formed CGE Associates, a joint venture with General Electric Credit Co. Hutton and GE specialize in commercial lending, including machinery, equipment and real estate that generate investment tax credits.
Newcomer said that GMAC early this year was briefly the No. 1 U.S. mortgage lender but that a recent acquisition had placed Lomas & Nettleton back on top.
GMAC Mortgage Corp. currently is offering rates of 9.625% on 30-year fixed loans with 20% down payment and 9.375% on 15-year loans with 20% down.