How GMAC built a lending powerhouse: GMAC Mortgage has surged into the forefront of leading players in the residential origination business. It boasts a unique multibranding strategy and a powerful affinity program with its GM family.

Mortgage Banking › Vol. 64 Nbr. 8, May 2004 ›

Author: England, Robert Stowe

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Cover Report: Origination Strategies

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How GMAC built a lending powerhouse: GMAC Mortgage has surged into the forefront of leading players in the residential origination business. It boasts a unique multibranding strategy and a powerful affinity program with its GM family.

IT WAS ONE OF THOSE "A-HA!" MOMENTS THAT LED GMAC Mortgage Corporation, Horsham, Pennsylvania, to overhaul its business strategy beginning in 1997. That was when the management team realized that GMAC had to be a major servicing consolidator in order to remain a viable and profitable player in the business. And to do that, it also had to dramatically increase loan production capabilities and diversify its origination channels.

"It was clear that the business was going to consolidate, and we wanted to grow rapidly on the lending side of the business because we saw the opportunity to be on the consolidating end," explains David M. Applegate, president and chief executive officer of GMAC Residential Holding Corporation, the holding company for GMAC Mortgage.

If GMAC Mortgage was going to rapidly expand the size of its residential servicing portfolio, it was going to need a more diversified distribution network to provide an engine to drive the production of servicing rights, according to Edward Hughes, executive vice president for consumer lending at GMAC Mortgage in Horsham.

Six year ago "we were 100 percent retail," Hughes recalls. The company had traditionally relied entirely on retail originations through its GMAC Mortgage branches spread across the country. Loan officers at these branches called on what is probably the world's largest affinity group--the hundreds of thousands of people who are part of the General Motors (GM) family of employees, retirees, suppliers and their employees, dealers and their em...

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