The company was founded in 1919 by General Motors Corporation as the General Motors Acceptance Corporation (GMAC) to be a provider of financing to automotive customers. Over the following years the business has expanded to include insurance, online banking, mortgage operations, and commercial finance.
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In 2006, General Motors Corporation sold a 51% interest in GMAC to Cerberus Capital Management, a private equity company. Also in 2006, GMAC divested a majority stake of GMAC Commercial Holdings, its real estate division, to a trio of investors — Goldman Sachs, KKR and Five Mile Capital Partners — thereby creating Capmark Financial Group Inc. Capmark later filed for bankruptcy and was acquired in part jointly by Leucadia and Berkshire Hathaway.
On December 29, 2008, the United States Department of the Treasury invested $5 billion in GMAC from its $700 billion Troubled Asset Relief Program (TARP).
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On May 21, 2009, the U.S. Treasury announced it would invest an additional $7.5 billion in GMAC LLC, which gave the U.S. government a majority stake in the company.
On December 30, 2009, the U.S. Treasury department said that they would invest another $3.8 billion in GMAC because the company had been unable to raise additional funds in the private sector. This raised the total government investment in GMAC to $16.3 billion.
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As of January, 2012, TARP had about $12 billion invested in Ally. The government stake represented a 74% ownership interest in Ally. In March, 2012, Ally failed the Federal Reserve's financial "stress test" for capital adequacy. The company said in a statement that the Fed's “analysis dramatically overstates potential contingent mortgage risk”. A possible outcome would be a requirement to raise additional capital.
On May 15, 2012, the company put its ResCap subsidiary into Chapter 11 bankruptcy after it failed to make an interest payment of $20 million on unsecured debt. ResCap had written off $22 billion in mortgages in 2009, 2010, and 2011 much of it subprime mortgages. The move was seen as attempt for the company to focus on its profitable core business of auto loans and direct banking (Ally showed a $2.72 billion profit in 2011 in its auto finance unit but had a $402 million loss at ResCap).
It seems pretty clear that mortgages and derivative instruments built on top of them are what really did them in, just like so many other banks.
That said, AFAICT the lending models for cars were no more sophisticated than those for houses. Lots of concern over individual borrower risks, but not much at all for an economic downturn that would sour many many loans at once and depress the value of the collateral at the worst possible time.
From wiki:
The company was founded in 1919 by General Motors Corporation as the General Motors Acceptance Corporation (GMAC) to be a provider of financing to automotive customers. Over the following years the business has expanded to include insurance, online banking, mortgage operations, and commercial finance.
...
In 2006, General Motors Corporation sold a 51% interest in GMAC to Cerberus Capital Management, a private equity company. Also in 2006, GMAC divested a majority stake of GMAC Commercial Holdings, its real estate division, to a trio of investors — Goldman Sachs, KKR and Five Mile Capital Partners — thereby creating Capmark Financial Group Inc. Capmark later filed for bankruptcy and was acquired in part jointly by Leucadia and Berkshire Hathaway.
On December 29, 2008, the United States Department of the Treasury invested $5 billion in GMAC from its $700 billion Troubled Asset Relief Program (TARP).
...
On May 21, 2009, the U.S. Treasury announced it would invest an additional $7.5 billion in GMAC LLC, which gave the U.S. government a majority stake in the company.
On December 30, 2009, the U.S. Treasury department said that they would invest another $3.8 billion in GMAC because the company had been unable to raise additional funds in the private sector. This raised the total government investment in GMAC to $16.3 billion.
...
As of January, 2012, TARP had about $12 billion invested in Ally. The government stake represented a 74% ownership interest in Ally. In March, 2012, Ally failed the Federal Reserve's financial "stress test" for capital adequacy. The company said in a statement that the Fed's “analysis dramatically overstates potential contingent mortgage risk”. A possible outcome would be a requirement to raise additional capital.
On May 15, 2012, the company put its ResCap subsidiary into Chapter 11 bankruptcy after it failed to make an interest payment of $20 million on unsecured debt. ResCap had written off $22 billion in mortgages in 2009, 2010, and 2011 much of it subprime mortgages. The move was seen as attempt for the company to focus on its profitable core business of auto loans and direct banking (Ally showed a $2.72 billion profit in 2011 in its auto finance unit but had a $402 million loss at ResCap).