GMAC's ResCap mortgage unit to cut 3,000 jobs

NEW YORK (Reuters) - Residential Capital LLC, the mortgage unit of GMAC Financial Services, said on Wednesday it will eliminate 3,000 jobs, or 25 percent of its work force, to cope with the U.S. housing downturn.

The second-largest independent U.S. mortgage lender after Countrywide Financial Corp CFC.N said the cuts will include administrative and managerial positions and be concentrated in businesses that have suffered most from lower lending volumes.

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

It said the latest cuts reflect "sharp downturns in the U.S. residential real estate markets and the global dislocation of the mortgage finance and credit markets. ... Severe weakness in the housing market and mortgage industry continues to prevail."

GMAC spokeswoman Gina Proia said most of the cuts will be in the United States, including 460 of 1,550 jobs at ResCap's Minneapolis headquarters. Other jobs will be lost in Canada and the United Kingdom, she said.

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

A majority of the job cuts will occur in the fourth quarter, when a majority of the charge will be incurred. "We're going to continue to look at our business and make changes needed to respond to the market," Proia said.

The cuts were earlier reported in The Wall Street Journal.

Standard & Poor's said it may lower ResCap's senior unsecured debt rating to "junk" status, and may also downgrade GMAC, citing "increasing uncertainty" about ResCap's "downsized business model." It rates ResCap debt "BBB-minus," its lowest investment grade, and GMAC debt "BB-plus," its highest junk grade.

General Motors Corp (GM.N) in November sold a 51 percent stake in GMAC to a group led by private equity firm Cerberus Capital Management LP CBS.UL. The automaker kept 49 percent.

Dozens of mortgage lenders have curtailed or quit operations this year as defaults have increased, home prices have fallen and investors have stopped buying many home loans.

Including ResCap, more than 100,000 housing-related jobs have been lost in the last year, according to outplacement firm Challenger, Gray & Christmas.

ResCap made $58.24 billion of home loans from January to June, ranking seventh nationally, according to the newsletter Inside Mortgage Finance. It lost $1.16 billion over that period.

Countrywide, the nation's largest mortgage lender, on Tuesday said it may take a $150 million charge as it cuts up to 12,000 jobs.

The value of ResCap and GMAC debt fell. ResCap's 7.375 percent notes maturing in 2010 fell 3 cents on the dollar to 80 cents, according to MarketAxess, yielding 16.92 percent. GMAC's 8 percent bonds maturing in 2031 fell 3.5 cents on the dollar to 94 cents, yielding 8.59 percent.

(Additional reporting by Dena Aubin and Chris Sanders)