GMAC Mortgage Cuts Jobs, Hopes For Better Outlook On Rest of Year!!!

The fallout from the U.S. housing slump and related credit crunch deepened last week with the news of thousands of mortgage-related job cuts and the release of the weakest home building figures in 14 years.

GMAC Financial Services said it will chop 3,000 jobs or about a quarter of the work force at its Residential Capital mortgage division. GMAC Financial Services blamed "sharp downturns in the U.S. residential real estate markets and the global dislocation of the mortgage finance and credit markets."

The credit squeeze has also forced the U.S. investment bank, Morgan Stanley, to cut about 300 jobs at its institutional securities business, the Associated Press reported. The U.S. Commerce Department said the construction of new homes last month fell by a much larger than expected 10.2 percent to its lowest level since March 1993.

In another negative sign, applications for building permits fell dramatically in September - also hitting a 14-month low. For GMAC mortgage, the job cuts come at a horrible time in which home sales are hitting a slump. GMAC hopes to have a better fourth quarter to end the year on a positive note, but the future home market does not look very bright.

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