GMAC Mortgage Death Watch

Bloomberg announced today that GMAC Mortgage is closing 200 offices and dismissing 5000 employees. This just keeps getting worse and worse. Where are they going to get $10 billion to avoid failing in the next two quarters? Oh yeah, that’s right, from the government via us, the US taxpayers. The hole we’ve dug for ourselves deepens.

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5 Responses to GMAC Mortgage Death Watch

  1. Avatar NAS says:

    A few years ago, March ’07 to be exact, we were vacationing at the Hyatt Regency in Kauai for special occasion. There was a large contingency of Pennsylvania GMAC employees also vacationing, ALL expenses paid. Let me tell you…. It was P-A-R-T-Y
    time! Corporate identity has many meanings, but this group missed that lecture. These “professionals” acted like a a couple of kegs full of mai tai’s fell off the back end of a pick up in the trailer park.

    I’m sure there are (were) many hardworking and ethical employees at GMAC, and my experience was isolated. Maybe the Hyatt will refund some money??

  2. Avatar DonC says:

    This was actually announced a month or so ago when leasing for GMC and Chrysler products was discontinued. GMAC was just a casualty of high gas prices. These prices killed the residual value of large SUVs coming off lease, and those are pretty much what GMAC wrote paper on.

    Private equity company Cerberus will take the brunt since it owns the majority of GMAC. GM will also take a smaller hit for its smaller share.

    No government bailout for GMAC although loans for retooling the factories are approved and more are probably on the way.

  3. Avatar homepop says:

    Wasn’t Di-Tech owned by GM?

  4. Avatar Inclinejj says:

    Sounds like the top sellers award trip

    Companies where very generous with this during the boom times..

    Countrywide and most Sub-prime lenders threw lavish parties..

    Countrywide even cancelled the party going to Aspen..

    History showed us that even when the Roman Empire was crumbling they where partying away!!!

    Countrywide Puts an End to Ski Junket
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    By MICHAEL J. de la MERCED
    Published: February 25, 2008
    Correction Appended

    The weather forecast may call for snow and good skiing conditions in Avon, Colo., on Monday. But no one at the luxury resort, near Vail, will be hitting the slopes — or eating $105 Kobe steaks — on Countrywide’s dime this week.

    Countrywide Financial, the besieged mortgage lender, has canceled a gathering of bankers from smaller mortgage banks at the Ritz-Carlton Bachelor Gulch ski resort (where room rates begin at $725), Countrywide said in a statement on Sunday.

    The company was to pay for 30 invited guests’ hotel rooms, meals, skiing and tips.

    In the statement, the company said that “in light of recent events” it had decided to cancel all gatherings with business partners and clients for the rest of the year, moving quickly after being criticized for planning such an extravagant event.

    The three-night gathering, which was to include business meetings as well as skiing, drinking and sampling expensive meals like $140 caviar and Kurobuta pork osso bucco at the Spago restaurant, had already drawn negative press. “Let ’Em Eat Kobe Steak,” a headline in The New York Post sneered on Saturday.

    Countrywide has held the gathering every year for its correspondent lenders, which make the loans and sell them to the company. And companies treating business partners to high-priced junkets is nothing new in the corporate world.

    But this year’s event coincides with a continued crisis in the mortgage markets. Default rates are skyrocketing. Countrywide, the nation’s largest mortgage company, has foreclosed on about 90,000 loans so far. Banks have called for intervention from the federal government to prevent a wider housing crisis.

    Moreover, Countrywide agreed last month to sell itself to Bank of America for $4.1 billion, a fraction of its former market value. It has reported a $422 million loss for its fourth quarter, after setting aside $924 million for credit losses and taking an $831 million impairment charge related to home equity lines of credit.

    It has also laid off more than 11,000 employees since last July.

    This article has been revised to reflect the following correction:

    Correction: February 26, 2008
    An article in Business Day on Monday about Countrywide Financial’s decision to cancel a gathering of bankers at the Ritz-Carlton Bachelor Gulch ski resort in Avon, Colo., referred incorrectly to the resort’s location. It is near Vail, Colo., not Aspen

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