Industry News

Mortgage troubles showing up in earnings reports

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Turmoil in mortgage and capital markets is showing up this week not only in the third quarter earnings of lenders including Bank of America Corp., Washington Mutual Inc., Citigroup Inc., and Thornburg Mortgage,  but mortgage insurers like PMI Group Inc. and online stock broker E-Trade Financial Corp. Also this week, GMAC Financial Services announced it will cut 3,000 jobs, or 25 percent of the work force at its Residential Capital LLC lending unit, and Countrywide Financial Corp. said its plan to eliminate up to 12,000 jobs as part of a restructuring of the company could cost $150 million. ResCap job cuts As "severe weakness in the housing market and mortgage industry continues to prevail," GMAC Financial Services said Wednesday it would layoff about 3,000 employees at its mortgage lending subsidiary, Residential Capital LLC. The layoffs, representing about 25 percent of ResCap's workforce of 12,000, will cost $90 to $110 million to implement. Countrywide layoffs Countrywide Fina...