Luminent Mortgage Capital Inc. said the company’s chief financial officer will leave the company at the end of the year rather than making the move from San Francisco to a new headquarters in Philadelphia.

Christopher Zyda declined an offer to relocate to Philadelphia, Luminent said in a press release, and will be replaced as CFO on Jan. 1 by Karen Chang, currently the company’s vice president and controller.

A real estate investment trust (REIT), Luminent does not originate or service loans, but buys alt-A adjustable-rate mortgage (ARM) loans, some that are negatively amortizing, and mortgage-backed securities with ratings below AAA.

Although Luminent once assured investors its loan portfolio had “virtually no exposure to the subprime sector,” troubles in the credit market have forced the company to take drastic steps.

On Aug. 6, Luminent was unable to roll over $168 million of commercial paper financing. Eight of Luminent’s creditors declared the company in default, triggering obligations for Luminent to repurchase $1.6 billion in loans, the company said in its last quarterly report to investors.

Between July 1 and Aug. 31, Luminent and its creditors liquidated more than $1.9 billion in mortgage-backed securities at a loss of $114 million to repay $1.8 billion in repurchase obligations, the report said. Luminent said it was also forced to sell $1 billion in mortgages at a $38.8 million loss to repay warehouse lenders.

As part of an Aug. 16 agreement with Arco Capital Corp. Ltd. that provided Luminent with a $60 million revolving line of credit, Arco was granted the right to purchase up to a 49 percent voting equity stake in the company.

On Oct. 1, Luminent announced the appointment of four new board members. Craig Cohen, co-founder of Proprietary Capital LLC and an Arco director, replaced Gail Seneca as chairman, while Arco CEO Jay Johnston and Arco COO Francesco Piovanetti were also named to Luminent’s board. Seneca and two other Luminent directors resigned, with the board increasing from eight members to nine.

At the time, Luminent said it had no further commercial paper liabilities, had repaid all of its warehouse lines of credit, and had paid off or negotiated settlements for all but $25 million in disputed repurchase liabilities.

The company said it has reduced expenses by downsizing its work force and plans to close its San Francisco office by Dec. 31.

In other news, Wachovia Corp. reported third-quarter net income of $1.69 billion, down 10 percent from a year ago, as it boosted provisions for loan losses to $408 million to reflect “modest deterioration in credit quality” and an uncertain credit environment and loan growth.

Net charge-offs were $206 million, or 0.19 percent of average net loans, and Wachovia reported total nonperforming assets including loans held for sale totaling $3 billion, or 0.63 percent of loans, foreclosed properties and loans held for sale.

Capital One Financial Corp. last week reported an $81.6 million net loss for the third quarter, compared with $587.8 million in profit during the same quarter a year ago.

Revenue was up 13.2 percent from a year ago, but the increase was partially offset by increased credit costs and larger allowances for loan losses.

Capital One said has almost completed its shutdown of GreenPoint Mortgage, a project that is now expected to cost more than $900 million, up from a previous estimate of $860 million. Capital One is taking an $883 million charge related to the closure during the third quarter, and expects another $23 million in expenses.

Capital One announced in August that it would close GreenPoint, the wholesale mortgage banking unit it acquired in December, shuttering the company’s California-based headquarters and 31 locations in 19 states and eliminating 1,900 positions.

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