As part of these plans Rescap is closing all 200 GMAC Mortgageretail offices and will cease originations through the Homecomingswholesale broker channel. It is also evaluating strategicalternatives for the GMAC Home Services business and the non-coreservicing business.

ResCap is also taking steps to narrow its focus on the lendingchannel it deems to be still competitive in this marketenvironment: Ditek and its call center operations will continue toprovide loans backed by GMAC bank deposits, the source says. Italso wants to capitalize on the FHA loan opportunities that will bemade available under the housing bill passed this Summer.

ResCap will also focus on increasing the capabilities of itsservicing division--specifically its special operations servicinggroup, the source says. ResCap has traditionally provided servicingto third party lenders. What it will now focus on growing isservicing for investors with "complex portfolios," such as hedgefunds, mortgage bankers and institutional investors, and otherinvestors that are capitalizing on the distressed assetopportunities, the source says. The source declined to discussexpected volumes or other changes made as part of thetransition.