GMAC slashing jobs, reducing mortgage lending

September 3, 2008 10:15:00 AM PDT
The housing crisis is hitting home for a subsidiary of GMAC.

Lender GMAC Financial Services says it will close 200 retail offices and lay off about 5,000 employees as part of plan to scale back its mortgage lending and servicing operations due to the downturn in the housing market.

GMAC says the layoffs will reduce the work force at its Residential Capital LLC subsidiary by 60 percent.

Some 3,000 employees may receive word of the cutbacks this month. Other cutbacks are expected to take place by the end of the year.

The Fort Washington, Pa.-based company also said Wednesday it would stop making mortgage loans through external, wholesale brokers.