ResCap to Cut 25% of Workforce Today

The Wall Street Journal Online is reporting that Residential Capital, GMAC's mortgage origination unit will lay off 25% of its workforce today. The unit, better known as ResCap, cost parent company GM nearly $1 billion in charges related to subprime loan quality issues when GMAC unloaded a 51% equity stake to Cerberus Capital Management (the same company that also purchased Option One from H&R Block). From the Journal: Residential Capital LLC, the home-lending arm of GMAC Financial Services, will announce a reduction of about 25% in its work force today, according to people familiar with the matter, joining a parade of lenders paring operations as loan demand slows and financing for mortgages tightens. ... In recent quarters, weakness at ResCap has been a drag on GM's bottom line.