Cerberus/GM-Owned GMAC Cuts Retail Mortgage Ops

According to a Reuters report: GMAC plans to cut 5000 mortgage jobs and shut 200 retail mortgage offices.

GMAC LLC said on Wednesday it plans to cut 5,000 jobs at its Residential Capital LLC mortgage unit, or 60 percent of that work force, and shut its 200 GMAC Mortgage retail offices as it combats weak credit and housing markets. GMAC also plans to stop offering home loans through its Homecomings wholesale brokerage channel, and is evaluating strategic alternatives for its GMAC Home Services and non-core mortgage servicing businesses.

ResCap expects to take a charge of $90 million to $120 million related to 3,000 of the job cuts. It sees an additional charge for the other job cuts. A group led by private equity firm Cerberus Capital Management LP controls GMAC after buying a 51 percent stake from General Motors Corp in 2006. The automaker owns the remaining 49 percent.

This was largely expected as GMAC works through the credit crunch. Their other mortgage operations are functioning as normal. This includes purchasing high-quality loans from and providing warehouse lines of credit to qualified mortgage banks.