WASHINGTON - The Treasury Department plans to exit its investment in GMAC Financial Services by slowly selling off its majority stake in the finance company, but likely not until 2011, The Detroit News reported.

The disclosure came as two financial analysts suggested that the best route for the Detroit company may be a bankruptcy filing, with GMAC's former parent -- General Motors Co. -- buying back the auto financing portion of GMAC's business.

"The question about whether or not the best thing for GM and for the automotive industry is to have an independent GMAC seems to be highly questionable," Elizabeth Warren, chairman of the Congressional Oversight Panel overseeing the $700 billion Wall Street and auto bailout fund, said Thursday after a hearing before the panel.

The oversight panel, which criticized the government's three rounds of bailouts for GMAC, totaling $17.2 billion, plans to release a report next month on its recommendations for the company's future.

The Treasury now owns a 56.3 percent majority stake in the lender. The agency's top auto advisor, Ron Bloom, and chief restructuring officer, Jim Millstein, said in testimony at the Thursday's hearing that Treasury will "likely exit its investment in GMAC through a gradual sale of shares following a public offering."

Millstein told the panel that an initial public offering for GMAC isn't likely until 2011; GMAC CEO Michael Carpenter said an offering "could be possible over the next two years."

Carpenter said GMAC is not likely to receive more taxpayer funds and there is a "high likelihood" the government will be repaid in full.

Warren said the government's three bailouts of GMAC -- in December 2008, May 2009 and December 2009 -- "require special scrutiny."

"On each occasion, Treasury had a choice to make on behalf of taxpayers," Warren said.

GMAC is the nation's 14th largest bank and has 19,000 employees. It services $60 billion in consumer auto loans for over 4 million customers, and 3 million residential mortgage loans through its Residential Capital unit, known as ResCap.

GMAC provided $18 billion in new auto loans last year, including 30.3 percent of loans for GM sales in the fourth quarter.

Carpenter, a board member who became CEO last November, noted that GMAC finances 91 percent of GM dealers and 77 percent of Chrysler dealers.

Without government funding, "numerous GM and Chrysler dealers would not have survived, and thousands of consumers would not have been able to buy GM or Chrysler vehicles," Carpenter said.

He noted that GMAC has made $1 billion in dividend payments to the Treasury Department "and plans to repay the U.S. government in full over the next several years."

Carpenter said ResCap is a "problem to be solved, not an opportunity." He added that GMAC wants to be "freed from that burden" over time, and is exploring strategic alternatives for the unit.

GMAC has retained two Wall Street securities firms to advise it on what to do with ResCap. The company hopes to make decisions in the next few months, Carpenter said.