Word on the street is that Washington Mutual plans to scrap wholesale mortgage lending, following in the footsteps of Bank of America and scores of other now defunct lenders.
At this time, it’s uncertain how many employees will be affected by the Seattle-based bank’s decision and what facilities will be closed as a result, but layoffs could be in the thousands.
I’ve received several e-mails corroborating the news, including the following e-mail sent from WaMu to a mortgage broker that details the plans:
It’s unclear if this has anything to do with the $5 billion capital infusion from TGP that was reported this morning, but it could easily be one of the conditions tied to the deal.
The news will definitely be a blow to mortgage brokers nationwide, with few funding options remaining as banks continue to embrace the retail route.
Makes you wonder if Countrywide will be the next to pull out of wholesale lending…
Take a look at the latest list of closed lenders, mortgage layoffs, mergers, and rumors.
Update: It’s official, WaMu plans to exit wholesale, cut 3,000 jobs, shut all its freestanding home loan offices, slash its dividend to a penny, report a $1.1 billion first quarter loss, and raise $7 billion via its TPG investment.
Also, the last day to submit a loan is this Thursday, and the last day to fund all active loans in the pipeline is June 15.
Shares of the mortgage lender were down $1.08, or 8.21%, to $12.07 in early afternoon trading.