GMAC ResCap - Closing Mortgage Offices and Slashing Jobs
Author: Rob K. Blake
Published: September 3, 2008
Residential Capital, LLC (ResCap) the home lending subsidiary of GMAC Financial Services announced today the closing of all GMAC Mortgage retail offices and their Homecomings wholesale mortgage arm. ResCap will cut 5,000 jobs or 60 percent of the mortgage workforce.
GMAC ResCap Fell Far
Reuters reports,
“ResCap was the seventh-largest U.S. mortgage lender from January to June, making $35.7 billion of loans, according to the newsletter Inside Mortgage Finance. It said the latest job cuts will leave it with roughly 3,000 employees, down from a reported 14,000 at the beginning of 2007.”
ResCap has and GMAC have from April-June lost $1.86 and 2.48 Billion respectively. So regardless of the gross number of originated mortgages, they can’t seem to make a profit. Of course, the writedowns on previous loans is the problem there, not the new originations.
Also the companies two owners ( Cerburus Capital Management and General Motors Corp) are having cash flow problems of their own. It’s hard to keep others afloat when your own boat is sinking.
ResCap is the owner of the infamous Ditech Mortgage which we reviewed (unfavorably) months ago. Click the link to read Ditech Mortgage Review.
The good news here is if GMAC Mortgage and ResCap go under we’ll never have to see those stupid Ditech TV commercials anymore.
A silver lining for every cloud…
Good Luck!
Author: Rob K. Blake
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I have a mortgage with GMAC. I have an excellent credit record. What happens to my mortgage if GMAC goes under?
Jim,
Nothing usually since the current loans on the books at the time of failure get transferred to a new company that buys them out or government agency that takes over via conservatorship.
You just keep making your payment throughout the transfer process.