The Yahoo! headline says most of it: GMAC slashing workforce; reducing mortgage lending.
I discussed the GMAC problems at Marginal Utility almost eighteen months ago. Things haven’t gotten much better since then. But some of the Mortgage Industry players have changed partners:
Lender GMAC Financial Services said Wednesday it will close all of its 200 retail offices and lay off about 5,000 employees as part of plan to reduce its mortgage lending and servicing because of the housing market downturn.
The majority of the layoffs are slated for GMAC’s mortgage lending division, Residential Capital LLC, known as ResCap, and will reduce work force at the unit by 60 percent, the company said.
“While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment,” Tom Marano, ResCap’s chairman and CEO, said in a statement. “Conditions in the mortgage and credit markets have not abated and, therefore, we need to respond aggressively by further reducing both operating costs and business risk.”
Tom Marano—who knows mortgages and the mortgage market inside and out—was, prior to his moving to ResCap, the head of mortgage origination at Bear Stearns.