Wachovia Corp. is scaling back mortgage lending in 16 states where it has no retail bank branches and in three others where it has a small branch presence, a spokesman confirmed today.
The Charlotte bank is closing mortgage offices in these 19 states but will continue to offer mortgages to customers through its Web site, call center and direct-mail channels, spokesman Don Vecchiarello said. In Illinois, Kansas and Mississippi, Wachovia also will offer a limited selection of mortgage products through its retail bank branches, which will remain open.
Wachovia has been restructuring its mortgage operations in the face of ballooning loan losses and shrinking demand. Last month, the bank said it would stop making loans through outside brokers and that it would eliminate 4,400 mortgage jobs, about 38 percent of the unit's workforce, to cut costs. Wachovia also has stopped making controversial Pick-A-Payment mortgage loans, the signature product it inherited in its ill-timed 2006 acquisition of California-based Golden West Financial Corp.
The latest action will eliminate about 125 jobs and close an undisclosed number of offices. The job cuts are part of the 4,400 positions being eliminated.
Closing the mortgage offices is part of the bank's strategy to “enhance customer relations” in locations where the bank also has bank branches, Vecchiarello said. Wachovia has branches in 21 states from Connecticut to California.
Vecchiarello emphasized the bank is still offering a full line of mortgage products through branches and mortgage offices in 18 states and to a broader customer base through its Web site and call centers.
In states where Wachovia has branches, Vecchiarello said the bank continues to have a dual sales force – mortgage consultants based in mortgage offices who work on commission as well as branch-based consultants who receive a salary. Wachovia's new head of retail mortgage sales, Scott Fisher, is evaluating this structure, Vecchiarello said.