UPDATE 3-GMAC has $7.46 bln profit, main units still in red

* Ends five quarters of losses thanks to one-time gain

* ResCap unit has ninth straight quarterly loss

* Credit losses increase, markets remain stressed (Adds CFO and analyst comments, financial details, byline)

By Jonathan Stempel

NEW YORK, Feb 3 (Reuters) - Finance company GMAC LLC, which won a government bailout in December, posted a $7.46 billion fourth-quarter profit on Tuesday as a gain from a debt swap offset billions of dollars of losses in its auto and mortgage units.

The profit compared with a loss of $724 million a year earlier and followed five straight quarters of losses totaling $7.9 billion. An $11.4 billion gain tied to the debt swap offset losses of $1.31 billion from auto finance and $981 million from home lending. The rate of credit losses doubled.

Detroit-based GMAC in December won bank holding company status from the U.S. Federal Reserve, allowing it to tap low-cost funding and support the struggling automaker General Motors Corp GM.N, to which it is the main lender.

It also got a $6 billion government bailout, in which the U.S. Treasury Department took a $5 billion stake by acquiring preferred stock with an 8 percent dividend and loaned GM up to $1 billion to buy GMAC equity.

"The auto finance business showed significant fundamental weakness," said Christopher Wolfe, an analyst at Fitch Ratings, after the GMAC results were released. "The credit picture remain challenging, but GMAC has gotten the operating flexibility to weather the storm."

GMAC's bailout required private equity firm Cerberus Capital Management LP [CBS.UL] and GM to slash their respective 51 percent and 49 percent stakes in the lender.

Many analysts believe GMAC might have failed had it not gotten government help and done the $21.2 billion debt swap.

GMAC is also retooling its board, adding three independent directors and replacing J. Ezra Merkin as chairman. Merkin is winding down some investment funds following losses tied to financier Bernard Madoff's alleged fraud.

"Funding markets remain stressed, credit performance is deteriorating, and home and auto prices are dropping," GMAC Chief Financial Officer Robert Hull said on a conference call. "We made the tough choices, I believe, and once again, as I like to say, we are still here."

OPERATING LOSSES PILE UP

GMAC's $1.31 billion loss from auto finance compared with a year-earlier profit of $137 million. It reflected higher loan losses as well as lease writedowns as used car prices fell.

The $981 million loss at the Residential Capital LLC mortgage unit compared with a loss of $921 million a year earlier and was the unit's ninth straight quarterly loss. The loss would have been higher but for a $754 million gain from the debt swap.

Insurance generated a $95 million quarterly profit, up from $68 million a year earlier, as a gain from selling a reinsurance business offset a goodwill writedown and lower U.S. volumes.

Net revenue more than tripled to $11.42 billion. GMAC set aside $1.34 billion for loan losses, up from $1.02 billion.

Since getting government help, GMAC has loosened its rules to allow loans to vehicle buyers with credit scores of at least 621, compared with a previous floor of 700. The higher level excluded about two-fifths of U.S. consumers. "We're simply returning to some of the markets we left," Hull said.

ResCap's status remains uncertain, following about 10,200 job cuts over two years. Despite slashing loan volume by 40 percent, ResCap was the sixth-largest U.S. mortgage lender in 2008, the newsletter Inside Mortgage Finance said.

GMAC on Tuesday repeated its lukewarm support for ResCap, calling it an important subsidiary but saying it would provide more support only if it were in GMAC stakeholders' interest.

Hull said there are "open discussions" with the government about ResCap, but declined to elaborate.

GMAC also said it is applying to sell debt through the U.S. Temporary Liquidity Guarantee Program, and may participate in the Term Asset-Backed Lending Facility, which aims to support auto loans, credit cards, student loans and small businesses. (Reporting by Jonathan Stempel; Editing by Lisa Von Ahn and John Wallace)