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Thu Feb 09, 2012
GMAC Financial Services said Thursday it lost $5 billion in the fourth quarter of last year. According to the company’s earnings statement, the results were “largely affected by losses related to legacy assets in the mortgage operations.”
The fourth quarter deficit compares to net income of $7.5 billion for the same period in 2008. For the full 2009 fiscal year, GMAC reported a net loss of $10.3 billion, compared to net income of $1.9 billion the year before.
BusinessWeek reported Wednesday that GMAC plans to cut jobs within its mortgage lending unit, Residential Capital LLC (ResCap), in addition to shuttering one of its offices.
A company spokesperson told the publication that 313 positions will be eliminated from ResCap’s operations in Costa Mesa, California, and Charlotte, North Carolina. The Charlotte office will be closed, and the Costa Mesa office will keep about 30 people, GMAC spokesperson Gina Proia said.
Ditech, GMAC’s online mortgage lender, is housed at the California site. “It’s really disappointing to see this happen,” Paul Reddam, who founded Ditech in 1995 and sold it to GMAC in 1999, told BusinessWeek. “We had 800 employees when I left the company,” he said.
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