Many lenders have laid off workers, closed branch offices or both. Just last month, New York-based Citicorp announced it would furlough 2,000 workers by 1992; San Diego-based HomeFed Bank recently lost more than $100 million in a single three-month period and laid off more than 300 people earlier this year.
"We think that the worst is over," said Dennis Casey, a HomeFed vice president. "At least, we hope it is."
Even the few lenders who are reporting revenue gains say they're being forced to do business a bit differently than when the market was red hot.
"We're advertising more, and our loan officers are making a lot more visits to realty offices to drum up business," said Richard H. Deihl, chairman of lending giant Home Savings of America.
"You can't sit around and wait for the phone to ring. You have to get out there and hustle."
Borrowers have generally benefited from the slowdown.
"I think that service has improved all across the board," said Steven McGough, a senior vice president at Glendale Federal Bank.
"Loans are getting approved faster, and there's much more personalized service than there was before."
On the downside, many lenders are giving more scrutiny to loan applications and rejecting marginal borrowers who might have gotten a loan a year or two ago.
In addition, most lenders have stopped offering adjustable-rate mortgages with unusually low introductory rates, in part because they're worried that borrowers won't be able to handle the monthly payments when the rate is adjusted upward.
"Those ARMs with real low initial rates are pretty much a thing of the past," said Sam Lyons, a senior vice president with Great Western Bank. "A lot of the institutions that were making those loans have gone out of business, and the rest of the industry has learned from their mistakes."
