(Rewrites with ABN Amro comments)

FRANKFURT, April 10 (Reuters) - ABN Amro Hypotheken Gruppe will freeze its new residential property financing business in Germany because of the debt market crisis, reorganizations and lack of "solid growth" prospects, a spokeswoman said on Thursday.

ABN Amro's AAH.AS property financing business in Germany had a loan portfolio of about 850 million euros ($1.35 billion).

The Dutch parent company of the German finance unit, ABN Amro Hypotheken Groep, will continue its operations in the Netherlands, the ABN spokeswoman said.

ABN Amro Deutschland, a different ABN banking unit, will operate in Germany as usual, a second ABN spokeswoman said.

Earlier an official with ABN Amro Hypotheken Gruppe told German Handelsblatt newspaper that the bank would freeze its property financing business April 22.

"We never had thought that the crisis could hit a major player like us who does not securitise its loans," Walter Capellmann, managing director for the German unit, told the paper.

The mortgage lender would currently make a loss on every new loan because it was not able to pass on higher hedging costs to customers, Capellmann told the paper.

ABN Amro Hypotheken Groep is part of Dutch-Belgian financial services group Fortis (FOR.BR: Quote, Profile, Research)(FOR.AS: Quote, Profile, Research).

U.S.-based GMAC Financial Services froze its residential property financing business in January after the market turmoil that had made refinancing harder. (Reporting by Mantik Kusjanto, additional reporting by Gilbert Kreijger in Amsterdam; editing by Elaine Hardcastle and Carol Bishopric)