Western Financial Bank, a unit of Westcorp, said it will slash 200 jobs from its mortgage banking department, or 55% of that department's work force.
The bank will also close 10 of its 14 mortgage banking offices. As a result, it will take a $3 million charge in the fourth quarter due to severance, lease terminations, and writeoff or dispositon of assets from the closed offices.
Western Financial is restructuring its mortgage department to focus more on origination of subprime and nonconforming loans. It originated more than $40 million subprime loans in the fourth quarter, and sold them for an average price of 103.75% of face value.
The bank intends to sell all of its production and will service loans only while they are held for sale. Last October it sold its entire $4 billion servicing portfolio.