HERNDON, Va. - The online loan exchange Pedestal Inc., which is shifting its focus to whole loans, confirmed a source's report that it is laying off some of its roughly 60 employees.

"There are fewer and fewer major players," company spokesman John Lewis said in an interview Monday. "You've seen some larger firms exit the business altogether."

This consolidation has left the market to just the mortgage lending giants, which "don't have problems buying pools of loans," Mr. Lewis said. This lowered demand for whole-loan pool trading explains Pedestal's new emphasis on individual and correspondent loan sales and explains the layoffs, he said.

One to three employees will be let go in each department except technology, which is adding people, Mr. Lewis said.

Pedestal, a public company that was founded in 1997 and took its current name in fall 1999, is now concentrating on individual and correspondent loan sales and such new products in that market as the Mortgage Partnership Finance Link program. That program is designed as a sales channel for loans that are ultimately being sold to members of the Federal Home Loan Bank system.

"We got to the point where we had to say, 'Which pieces of our business that we really want to focus going forward?' " Mr. Lewis said. "We decided to focus on the flow delivery and MPF products and de-emphasize the whole-loan pool trading," and that means staff cuts, he said.

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