Mortgage lender to cut 3,000 jobs

Residential Capital, the mortgage unit of GMAC Financial Services, said Wednesday that it would eliminate 3,000 jobs, or 25% of its workforce, to cope with the housing downturn.

The lender, known as ResCap, is the second-largest independent U.S. issuer of home loans, after Countrywide Financial Corp.

The company said the cuts would include administrative and managerial positions and be concentrated in businesses that had suffered most from lower lending volumes.

ResCap employs about 12,000 people after having cut 2,000 jobs from January to June.

The latest cuts are a result of “sharp downturns in the U.S. residential real estate markets and the global dislocation of the mortgage finance and credit markets,” the company said. “Severe weakness in the housing market and mortgage industry continues to prevail.”

GMAC spokeswoman Gina Proia said most of the cuts would be in the U.S., including 460 of 1,550 jobs at ResCap’s Minneapolis headquarters.

Other jobs will be eliminated in Canada and Britain, she said.

ResCap expects the cuts to result in cash outlays of $85 million to $95 million and restructuring charges of $90 million to $110 million.

From Times Wire Services