GM Lending Arm Pumped Up

Khattri also acknowledged that mortgage earnings had benefited from a write-up in the value of so-called mortgage servicing rights, which are balance sheet items that represent the expected earnings from administering payments on mortgages.

The MSRs tend to get marked up when interest rates rise. However, no number for GMAC's first-quarter MSR gain was given out. And if there was a big jump in the value of these in the first quarter, it could easily be reversed this quarter, as interest rates have fallen.

GMAC's overall earnings took a big dent in the first quarter from a rise in interest costs, which were $3 billion in the first quarter vs. $2.2 billion in the year-earlier period.

GM's Simonetti says that GMAC has made great strides in protecting itself against an increase in interest rates and that should protect the unit against any further rises in rates.