[September 05, 2008]

GMAC cuts leave 27 without work

(Waterloo-Cedar Falls Courier (IA) (KRT) Via Acquire Media NewsEdge) Sep. 5--WATERLOO -- Lender GMAC is streamlining its mortgage operations, and it is going to cost 27 employees their jobs in Waterloo and Cedar Falls.

The Pennsylvania-based lender, which announced Wednesday it was cutting 3,000 workers -- about 25 percent of its work force -- from its Residential Capital LLC lending arm, also known as ResCap, by the end of September.

As many as 2,000 employees in other GMAC branches will lose their jobs by the end of the year, said Jeannine Bruin, a company spokeswoman.

GMAC also is shuttering its retail operations in Cedar Falls and Waterloo at the end of business today, Bruin said.

The Waterloo service center also will cut 16 positions from its current roster of 657 by the end of the month, Bruin said.

As retail stores in Urbandale and Anamosa are shuttered, eleven more GMAC employees will be out of work, Bruin said.

"We have a large servicing presence in Waterloo, and that is ResCap's' core function, along with lending through our direct channels and call centers," Bruin said. "We'll still have a heavy presence in Iowa."

She said the cuts are a result of slumping residential sales across the U.S. and in international markets.

ResCap, based in Minneapolis, employs about 12,000 people.

The wave of cutbacks is the second this year at ResCap, which trimmed 2,000 earlier.

The company's steepest cuts will be in Minneapolis, where about 460 of 1,550 workers will lose their jobs; and Horsham, Pa., with 180 cuts.

On July 31, GMAC reported a $2.5 billion second-quarter loss and $254 million in losses at ResCap.

Bruin said the changes make ResCap more nimble and less susceptible to changes in the loan market.

All eligible employees affected by the workforce reduction will be provided severance packages and outplacement assistance, the company said.

Bob Reisinger, executive director of the Waterloo-Cedar Falls Board of Realtors, said the cutbacks likely would have little, if any, effect on the local housing market.

"I doubt it would affect it a whole lot," he said. "I go back into the '70s and '80s, when we only had savings and loans and local banks that we had for financing real estate. ... Anybody leaving the market, whatever their business was, somebody would pick it up."

Dick Robert, president and broker/owner of Cedar Falls Real Estate Co., and former president of the Iowa Association of Realtors, said the development probably wouldn't have any negative effect on the local real-estate market.

"I think it's symptomatic of the mortgage situation across the country, where some mortgage organizations may have been taking a little bit higher risk than others," he said. "But again, here in Iowa, as is often the case, we're going to have to pay the price for mistakes made elsewhere across the country."

Contact Jim Offner at (319) 291-1598 or jim.offner@wcfcourier.com.

To see more of the Waterloo-Cedar Falls Courier, or to subscribe to the newspaper, go to http://www.wcfcourier.com/.

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