Reaction with Mark Demos of Fifth Third Asset Management; Washington Mutual Expects Net Loss for 4Q, Will Raise $2.5 Billion in Additional Capital, Reduce Dividend; WaMu Closing About 190 of 336 Home Loans Centers and Sales Sites
WaMu Cuts 22% of Loan Jobs, Exits B&C
Washington Mutual, once a powerhouse in the mortgage industry, says it will trim 22% of its home loan staff, eliminate its subprime channel, and take a whopping $1.6 billion writedowns in the fourth quarter.
On Monday afternoon the nation’s largest thrift also said it would raise $2.5 billion in new capital through a convertible preferred offering and slash its dividend by 73%.
The Seattle based WaMu said it remains committed to the mortgage business but noted that the industry is undergoing a “fundamental shift due to credit dislocation and a prolonged period of reduced capital markets liquidity.” In total, it is eliminating 3,150 jobs, including 2,600 in its mortgage group. As previously reported, it is also closing its warehouse division.
In trading Tuesday morning, WaMu’s stock was down 9% to $19.88 a share.
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Tags: Lenders With Problems 2007, Mortgage Layoffs, Mortgage News, Mortgage Video, Washington Mutual, www.wamu.com
