Knutson Mortgage Corp. is shutting down its California wholesale office and will do all its business out of its Minneapolis office.
The consolidation will leave the company with one wholesale lending platform, rather than separate platforms in the two offices. Knutson's San Ramon, Calif., operations will shut down by Aug. 1. Ray W. Sims, president and chief executive, said 49 people in that office will be laid off as a result.
He said shrinking profits in wholesale lending led to the closing. The California staff worked outside the office, visiting mortgage brokers and lenders. The Minneapolis staff does not go on external sales visits, but rather telephones brokers and correspondents in target markets.
"We know we can control costs better if we have one location that is more flexible, rather than the situation in San Ramon, where there's not much flexibility," Mr. Sims said. The internal sales people in Minneapolis can make many more calls in a day and be more productive than the mobile sales force in California, he said.
Members of the Minneapolis staff are trained to perform functions other than sales calls, and thus can move to other departments when the need for salespeople declines.
The company said it's easier to track the amount of specific-customer contact when the sales force is internal and telephone-reliant than it is with an external sales force and more than one office.
Mr. Sims said the consolidation will help the company target new customers. His goal is to expand fundings from the current $1 billion a year to $1.5 billion next year and $2 billion the following year.
Knutson previously decided to work with two platforms and two offices to serve customers across many time zones.
Knutson Mortgage is owned by Chase Capital Partners, the merged venture capital groups of Chase Manhattan Corp. and Chemical Banking Corp.; Goldner Hawn Johnson Morrison, an investment group; and Knutson officers and directors.