GMAC-RFC has closed its sub-prime subsidiary High Street Home Loans and cut 266 jobs, around a quarter of the lender’s workforce.
Corporate relations manager Julie Gaskin says it will be axing 200 jobs at GMAC and 66 jobs at Newcastle-based HSHL.
She says it informed staff of changes at 3pm on Tuesday and will now enter a 90-day consultation period.
Gaskin has reassured brokers and packagers that GMAC will honour all offers made by HSHL.
This comes as mortgage broker Black and White Group confirmed this week that it has asked 50 staff to consider voluntary redundancy due to the difficult market conditions.
Gaskin says HSHL’s manual process does not fit in with the lender’s automated strategy. GMAC says it will concentrate on creating cost efficiencies across its divisions and focus on further utilising its technology platform.
GMAC chief executive officer Simon Knight says: “The market will be smaller, especially in the non-conforming space. That’s a reality. While the majority of our business is in the prime space, we are not immune to the unprecedented volatility in the global credit markets which lenders have been facing. We have to react quickly to change and these moves are designed to put us in a very strong competitive position for next year and beyond.”