National City Corp. has narrowed mortgage lending channels to wholesale and retail.
National City closed its correspondent lending operations Tuesday, spokesman Chris Kemper told MortgageDaily.com in an e-mail statement today. The channel stopped taking loans as of 5 p.m. Eastern time.
"Unprecedented volatility in mortgage markets and a significant downturn in origination activity have resulted in significant challenges for our company and the mortgage industry," the statement read. "Tightening conditions have greatly curtailed correspondent lending capabilities industry wide, and it was determined that it no longer fits within our long-term strategy plan."
The Ohio-based lender today announced third quarter residential volume of $13.5 billion tumbled 24 percent and 38 percent from the linked and year-ago quarters, respectively.
The majority of correspondent lending employees worked in Pittsburgh, Penn., Kemper said. While he declined to disclose the number of layoffs, he said the company did not anticipate the exit from correspondent lending would trigger a WARN notice nor result in any closed facilities.
Employers covered under the federal Workers Adjustment and Retraining Notification Act are required to give advance notice of 60 days when at least 50 jobs will be eliminated within a 30-day period at a single site of employment, according to the Pennsylvania Department of Labor and Industry.
As of Sept. 30, National City reportedly had 7,207 mortgage banking employees. Approximately 1,300 layoffs were announced in the last two months of the period, of which 800 were due to reduced demand for nonconforming product and another 500 from consolidating National Home Equity into National City Mortgage.