Mortgage market slowdown prompts job cuts

From the NY Times:

2 Subprime Lenders Announce Job Cuts; Call Centers Closed

General Electric’s subprime lending unit, WMC Mortgage, closed three centers yesterday and cut 771 jobs — about half of its remaining staff — while the Residential Capital home-lending unit of GMAC announced it would eliminate as many as 700 workers, or 5 percent of its American work force.

The moves were part of a broad retrenchment in the subprime lending industry amid mounting loan losses.

A WMC spokeswoman, Brandie Young, said that WMC Mortgage was tightening lending standards and reducing loan originations in the United States, and would have about 700 employees in two call centers after the cuts. The cuts, first reported by Reuters, are in addition to the reduction of 460 jobs announced in March.

At GMAC, about 600 to 700 workers will lose their jobs by midyear, and at least 300 vacant positions will not be filled, a spokeswoman, Gina Proia, said in an interview. Residential Capital, known as ResCap and based in Minneapolis, will have about 12,000 employees after the reductions are made, she said.

“The decision was influenced by current market conditions and the deterioration of the U.S. mortgage market,” Ms. Proia said.

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