In a public filing it cited a decline in the origination market and deterioration in the sub-prime sector as the chief reasons for the cuts.
As MortgageStrategy went to press a spokesman for ResCap said no cuts were planned at GMAC’s European operations but it will close three of GMAC’s six residential servicing locations, leading to job losses at Blue Bell in San Diego, California, and Shelton.
The ResCap/GMAC family includes GMAC Residential, a mortgage banker and servicer, GMAC-RFC, a correspondent buyer of loans and Homecomings Financial, a broker wholesale platform. All three service loans as well.
Detroit-based General Motors owns 49% of GMAC but a majority of the firm is controlled by hedge fund Cerberus Capital Management of New York. Last April Cerberus and two partners agreed to pay $14bn for the GMAC family of companies.
When Cerberus inked the deal it said it would grow the business, but the sagging the US market has spurred it to trim expenses and focus on increasing economies of scale.
As one GMAC competitor says: “The cost cutters at Cerberus are going to work.”
The company says severance and related expenses will cost $10m, but eventually it will save $65m a year.
In a statement to the Securities and Exchange Commission, the company says: “ResCap’s decision is driven by factors including slower originations, shifts in home prices and a challenging interest rate environment.”
It also blames an ailing sub-prime sector.