Slowed mortgage demand led Deutsche Bank to become the latest investment banker to lay off hundreds of mortgage employees.
This week held the layoffs of 580 employees at Deutsche subsidiary MortgageIT Inc., a source close to the matter said. Each worker will receive an offer of severance.
"Deutsche Bank still maintains an active loan origination platform, but is reducing its residential mortgage origination business in line with current market conditions and industry demand," a statement e-mailed by a Deutsche spokeswoman read.
The job cuts represent about 28 percent of the reported 2,100 employees MortgageIT had when it was acquired by Deutsche on Jan. 3 for $430 million. Overall, the reductions represent less than 1 percent of Deutsche's workforce, the source said.
The layoffs follow Deutsche's decision in August to consolidate the correspondent lending group into MortgageIT's wholesale lending division. The correspondent group, launched in 2004 to purchase closed nonprime loans from originators on a bulk and loan-by-loan basis, had lost investor interest for its products.
This week also saw layoff announcements from fellow investment bankers Bear Stearns, which said the consolidation of its Bear Stearns Residential Mortgage and Encore Credit units would result in 310 job reductions, and Morgan Stanley, which said a restructuring of its residential mortgage business would leave around 500 domestic and 100 European employees without jobs.