GMAC said on Wednesday it would cut thousands of jobs at its embattled mortgage lending arm, Residential Capital, and shut all 200 of its GMAC Mortgage retail offices in response to continued weakness in the US housing and credit markets.

The cuts, which will affect 5,000 staff or 60 per cent of ResCap’s workforce, are emblematic of the ongoing troubles at the mortgage lender, which narrowly escaped bankruptcy this year after banks agreed a $60bn refinancing package for GMAC and ResCap.