Chevy Chase to Cease Wholesale Lending in California

January 14, 2008 No Comments »

According to a source close to the company, Chevy Chase Bank’s Wholesale Lending Division will no longer originate new loans in California due to “escalating delinquencies, increasing fraud, and declining values”.

It is believed that management told staff today that beginning tomorrow the division would no longer accept applications for California-based loans that were not previously locked.

Apparently the company will wind down operations centers in California, though some may remain open to support other parts of the Western Region.

It is unclear at this time how many employees will be affected by the news/closures.

The same source also informed me that Chevy Chase stopped taking loan applications in Florida in mid-December, resulting in a number of Account Executive layoffs at the end of the month.

And noted that sister company B.F. Saul Mortgage was being dissolved.

In late November, the bank announced that it would reduce its 5,000-employee work force by roughly 300 positions and scale back evening hours at some of its branches to cope with the housing downturn.

Washington D.C.-based Chevy Chase Bank has been originating mortgage loans since 1892 and services more than $21 billion in loans, according to their website.

Update: I’ve been told today that all Western Region operations are being shuttered and that the Eastern Region will be covered by a handful of internal AE’s.

Check out the latest list of mortgage layoffs, closed lenders, mergers, and rumors.

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