ResCap May Close RFC Conduit

Residential Capital Corp. may close its Residential Funding Corp. conduit as part of a plan to slash its full-time work force, industry sources have told MortgageWire.ResCap, which controls RFC and GMAC Mortgage of Horsham, Pa., plans to stay in the correspondent business -- but through GMAC, sources said. A spokesman for ResCap would not comment on the layoffs but said the company will remain a correspondent lender. Created by Salomon Brothers back in the 1980s, RFC has a long history in the business. Its headquarters are in Minneapolis. "RFC is doing no volume right now," said one banker familiar with the company. ResCap is 51% owned by hedge fund Cerberus Capital Corp., which recently threw its subprime unit, Aegis Mortgage, into bankruptcy. Earlier this year Cerberus agreed to buy Option One Mortgage of California but the sale is in trouble.