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ResCap Closing Servicing Sites

Citing declining originations and an ailing subprime market, Residential Capital Corp. plans to slash 1,000 positions at its GMAC mortgage affiliates over the next nine months, according to a new public filing.

As part of the cutback, ResCap will close three of its six servicing locations, leading to job losses in Blue Bell, Pa., San Diego and Shelton, Conn.

ResCap said most of the reductions will take place by midyear and that 200 of the cuts reflect the firm not filling open positions.

A company spokesman said that despite the cuts, GMAC Residential plans to grow its retail sales force and is currently recruiting.

The company said severance and related expenses will cost it $10 million, but eventually the firm will save $65 million a year.

"ResCap's decision to reduce its workforce and accelerate its integration process is being driven by a number of factors, including slower originations, shifts in home prices and appreciation rates, a challenging interest rate environment" and the ailing B&C sector, the company says in a new filing with the Securities and Exchange Commission.

At the end of September, GMAC Residential ranked seventh nationwide among servicers with $324 billion in receivables. Homecomings ranked 13th with $124 billion. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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