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WaMu closing 2 mortgage divisions

The savings and loan's move means about 1,000 jobs will be cut.

September 13, 2007|From Bloomberg News

Washington Mutual Inc., the largest U.S. savings and loan, said Wednesday that it would shutter one division that bought mortgages from other home lenders and another that financed mortgage companies.

The closures will result in about 1,000 firings, Washington Mutual spokesman Alan Gulick said. But the Seattle-based company also plans to hire about 1,000 loan officers in the next few months in its mortgage and bank branches, bringing the total to about 3,000, he said.

"Some of the changes we've made today are in response to market conditions, but they're also about accelerating our growth," Gulick said. "We feel there is significant opportunity to leverage the power of WaMu's 2,200 retail stores."

At least 100 mortgage companies have sought buyers or halted lending since the start of 2006. A record number of Americans faced foreclosures in the second quarter, the Mortgage Bankers Assn. said last week.

Calabasas-based Countrywide Financial Corp., the largest mortgage lender, said Friday that it would cut 10,000 to 12,000 jobs. Lehman Bros. Holdings Inc., the biggest underwriter of mortgage-backed bonds, and Pasadena-based IndyMac Bancorp Inc., another large home loan company, also announced job cuts that day.

Washington Mutual has been shrinking its mortgage business since 2003, after the peak of the refinancing boom. Staff at its home loan group fell to 12,735 by June 30 from 15,560 a year earlier, Gulick said.

Included in the new cuts will be about 155 employees of a sub-prime loan processing center in Anaheim; about 90 loan-fulfillment workers each at centers in San Diego and San Antonio; 75 sub-prime mortgage sales and support staff; and about 210 posts in the firm's capital-markets business, Gulick said.

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