The cuts will affect 60% of ResCap’s workforce, but it’s UK lending arm GMAC-RFC stresses that the job losses wont have any impact on its operation.
Tom Marano, chairman and chief executive of ResCap, says: “While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment.”
GMAC has also stopped offering mortgages via its American broker channel Homecomings.
Marano adds: “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.”
ResCap says it will still originate mortgage loans where they are able to sell them on but that its focus now is expanding its servicing platform, particularly for arrears and repossessions.