Major reductions are taking place in the mortgage industry. Lender GMAC Financial just announced that they will be closing all 200 of their retail offices and let go of 5000 employees, as a result of the housing market. Over 3,000 employees will receive notice this month and the rest throughout the end of the year. Most or at least 60% of these reductions will take place in its mortgage lending branch, Residential Capital LLC, or ResCap. Several will also take place from their Business Capital Group, which specialized in making loans for home builders.

ResCap´s CEO/chairman, Tom Marano, commented on this developments, "While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment,...Conditions in the mortgage and credit markets have not abated and, therefore, we need to respond aggressively by further reducing both operating costs and business risk." In order to take care of severance costs, ResCap will incur a charge of $90-$120 million against their earnings.

GMAC will also stop dealing with loans made through outside wholesale brokers. ResCap will provide loans through labels like GMAC Mortgage Direct or Ditech. With these organizations, customers can make contact online or through call centers. Jeannine Bruin, a spokeswoman for them, says that "We're not going to have a retail presence where customers walk in the door,...(but) we are very much still originating loans and servicing the customer."