Chase Manhattan Mortgage Corp. has nearly completed its massive cost- cutting plan.

Thomas M. Garvey, Chase Mortgage's retail channel executive, said 40 retail offices have been closed nationwide since the merger of Chase with Chemical Banking Corp. was consummated in April. More than 30 overlapping retail offices were closed before that.

"Some branches were literally across the street from each other," Mr. Garvey said. "Some were even in the same building."

He said more than 40 wholesale offices would be closed soon. Wholesale offices generally have smaller staffs than retail offices.

In May, Chase Mortgage chief executive Thomas Jacob told American Banker that the company was going to close retail and wholesale offices to excise some of the excess infrastructure inherited in the merger.

He did not provide numbers, but sources said at the time that about 125 offices might be closed and as many as 1,000 employees might be laid off.

Chase, the nation's third-largest servicer and originator of mortgages, is not the only large mortgage bank to scale back this year. It shows that even the largest lenders must be vigilant about costs to compete in the cyclical mortgage banking environment.

Fleet Mortgage Group, the fourth-largest originator and servicer of mortgages, also announced in May that it planned to close up to 30 of its 75 offices.

A Chase spokesman said there are no plans to close any more than the 70 or so retail offices that have already been selected.

Mr. Garvey said all offices that will be closed already have been notified. He added that the closings would not affect production, because no loan officers are being laid off. Loan officers at closed branches may transfer to other offices.

Mr. Garvey said the integration of Chase's and Chemical's origination systems has been completed successfully.

This integration was especially difficult, Mr. Garvey added, because Chase had to integrate four different production systems - those of Chase and its subsidiary, American Residential Holding Corp., as well as Chemical's and Chemical's Margaretten Financial Corp.

To facilitate the origination process, most of the company's loan officers are using laptop computers in the field. Mr. Garvey added that customers aren't likely to notice any differences because of the office closings.

However, a source familiar with the company said that while there haven't been any significant job reductions on the origination side, some of Chase's back office employees - those involved with processing and servicing loans - are being let go.

Reportedly, Chase already has decided to close its servicing center in Tampa, Fla., and consolidate its servicing operations. The company has two other centers, in Worthington, Ohio and Monroe, La.

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