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Published on Thursday, September 04, 2008
By LA Daily News Staff Writer
Lender GMAC Financial Services said Wednesday that it will close all of its 200 retail offices and lay off about 5,000 employees as part of a 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 the work force at the unit by 60 percent, the company said.
In the first half of the year, ResCap's U.S. mortgage loan production was valued at about $35.7billion, down nearly 39 percent from the same period in 2007.
"While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment," ResCap Chairman and CEO Tom Marano 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
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