GMAC Financial Services

Lender GMAC Financial Services said that it will close all of its 200 retail offices and eliminate about 5,000 jobs as part of a plan to reduce its mortgage lending and servicing because of the housing market downturn. The majority of the job cuts are planned for GMAC's mortgage lending division, Residential Capital LLC, known as ResCap, and will reduce the workforce 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 $35.7 billion, down nearly 39 percent from the same period in 2007. The cuts renewed doubt about GMAC's effort to rescue ResCap, ranked eighth among U.S. mortgage companies last year and 12th in sub-prime home loans for 2006, according to trade journal Inside Mortgage Finance. GMAC lost $5.4 billion over the past year, and ResCap's losses in the last seven quarters total $7.2 billion. The mortgage unit is struggling to originate loans and the auto-finance unit is losing money. Some 3,000 employees may receive their pink slips this month. The rest are expected to lose their jobs by the end of the year, the company said.