Lender GMAC to close all 200 retail offices

Associated Press

September 4, 2008

LOS ANGELES - Lender GMAC Financial Services said yesterday it will close all of its 200 retail offices and lay off about 5,000 employees as part of plan to reduce its mortgage lending and servicing operations because of the housing market downturn.

The majority of the layoffs are slated for GMAC's mortgage lending division, Residential Capital LLC, or ResCap, and will reduce the work force at the unit by 60 percent, the company said.

"While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment," said Tom Marano, ResCap's chairman. "Conditions in the mortgage and credit markets have not abated and, therefore, we need to respond aggressively by further reducing both operating costs and business risk."

About 3,000 employees may receive word of the cutbacks this month. Other cutbacks are expected by the end of the year, the company said.