GMAC recruits 1,000 people to handle jumbo loans

General Motors’ Detroit based subsidiary GMAC LLC, that received government financial support announced that it intends to employ 1,000 people in order to handle a surge in refinancing and jumbo loans. GMAC also said Residential Capital LLC is making more jumbo loans, which are usually in amounts above $417,000, although borrowers are to put down 20% and more.

GMAC hesitated earlier this year about the ability of the mortgage unit ResCap to recover, after it saw $10 billion of losses throughout the nine-month period as the amount of bad loans and foreclosures was rising. In September GMAC had set plans to cut 57% or 5,000 ResCap jobs and close all 200 GMAC Mortgage retail offices.

However as soon as GMAC received $6 billion as a federal bailout in December and became a bank holding company, it got profits from a pickup in deposits and low mortgage rates. The government bailout required General Motors and Cerberus Capital Management LP CBS.UL, a private equity company, to cut their respective 49% and 51% stakes in GMAC.

According to Freddie Mac, this week the average rate on a 30-year home loan is 4.82, that is just above the 4.78% rate two weeks ago, the lowest since 1971 when the mortgage company started tracking it.