Westcorp Selling Last of Its Mortgage Unit

Westcorp has said goodbye to the mortgage business.

The Irvine, Calif., holding company said last week that it had signed a definitive agreement to sell what was left of its mortgage unit, WestWorks, to California Mortgage Service, a Santa Ana mortgage banker.

The sale followed Westcorp's exit from the servicing end of the business last year and an apparently fruitless experiment in subprime origination.

The company sold its $4 billion portfolio of mortgage servicing rights in October. The sale resulted in a writedown of $2.3 million. At the time, Westcorp's chief financial officer, Lee Whatcott, told American Banker the company was shifting its mortgage banking business away from originating A-quality loans and toward subprime loans.

In January, Westcorp slashed 200 jobs from its mortgage banking department, 55% of that department's work force, and closed 10 of its 14 mortgage banking offices. The cuts resulted in a $3 million charge in the fourth quarter due to severance, lease terminations, and writeoff or disposition of assets from the closed offices.

Westcorp officials did not return phone calls seeking comment last week. In a press statement the company's president, Joy Schaefer, said it would focus on its auto finance and community banking businesses.