A Connecticut-based lender with assets of $17 billion is scaling back its wholesale mortgage operation by closing offices and cutting jobs in three states.
Webster Bank is closing wholesale offices in Illinois, Arizona and Washington and eliminating 60 full-time jobs, bank spokewoman Alison Skratt said in an e-mail to MortgageDaily.com.
Mortgage loan volume in the three offices was $700 million in 2006 and $900 million this year, Skratt said.
The deteriorating mortgage market was a factor in the closings as The Waterbury-based company retrenches into its native New England, she said.
"Market conditions played an important role in our decision to close down these offices, but the decision is also part of a larger strategy on Webster's part to scale back operations outside our core market footprint in New England," Skratt said.
Webster reported third quarter net income of $35 million for this year. In its earnings statement Webster said it also had an $11 million increase in credit loss provisions due to the company's home equity portfolio.
"In an otherwise solid quarter, we have increased our provision for credit losses based on higher delinquency and non-accrual loans in our home equity portfolio, specifically for nationally originated loans with high combined loan to value," Webster Chairman and Chief Executive Officer James C. Smith said in the earnings statement. "Delinquency for the month of September rose substantially, and we believe taking this step is prudent given this emerging trend."
In materials prepared for a Nov. 14 Merrill Lynch Banking and Financial Services Investor Conference Webster outlined its new strategy, saying that mortgage lending "will focus exclusively on the New England and Mid-Atlantic states."
The company also mentioned it was "exiting national wholesale (lending) outside footprint."