National City Corp. announced via a press release on their website that they have exited the correspondent lending business.
The announcement states, “We have made the decision to exit the correspondent lending business as of 5:00 PM Eastern Time on Tuesday, October 23, 2007.”
The move was made in line with current and anticipated market conditions, likely because secondary mortgage market demand has come to a standstill.
“While this difficult decision was not taken lightly, this business line no longer fits with National City’s future mortgage business strategy,” said the release.
The mortgage lender did note that it would stand by its funding commitments and honor loans that were previously approved, though it’s unclear if unlocked loans will continue to be processed.
Cleveland-based National City Corp. will also eliminate a number of jobs throughout the company, though it’s unknown how many will be cut and where.
The job cuts, which are in addition to the 1,300 announced last month, have been described as “noncustomer or nonrevenue-generating areas”.
“We are undergoing a comprehensive and somewhat aggressive cost review in the budget planning process,” spokeswoman Kelly Wagner Amen said. “We do not take cutting these positions lightly. These are changes that are necessary to ensure the ongoing success of the company in the coming years.”
Shares of National City traded down 41 cents to $23.50 in after hours trading, hovering above their 52-week low of $23.33.
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