Industry News

Mortgage lender ResCap to eliminate 1,000 jobs

Slower originations, deterioration of subprime sector cited

Residential Capital LLC will lay off 800 workers by October and leave 200 openings unfilled -- a net loss of 1,000 jobs that will cost the mortgage lender $10 million now but save $65 million next year. Minneapolis-based ResCap, the real estate finance arm of GMAC LLC, said "slower originations, shifts in home prices and appreciation rates, a challenging interest-rate environment and the continued deterioration of the subprime sector" were the reasons for the job cuts. In an SEC filing, ResCap said the workforce reduction complements an integration of people, technology and systems in the company's Residential Finance Group. The integration, launched a year ago, also involves the development of a single debt-servicing utility platform, which will allow the company to provide servicing of any loan product from a single system. ResCap reported in November that loan production for the first nine months of 2006 increased 7.5 percent from the same period a year before to $140.1 billion. ...

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