Industry NewsMortgage

WaMu laying off 3,000, closing home loan offices

Bank will no longer lend through mortgage brokers

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Washington Mutual will lay off 3,000 employees as it closes all 186 of the bank's freestanding home loan offices and stops making loans through mortgage brokers, the company said this week in announcing a plan to raise $7 billion to offset mounting losses. WaMu officials released a preliminary estimate that the bank racked up a $1.1 billion net loss for the first quarter, with provisions for loan losses rising to $3.5 billion and net charge-offs on bad loans hitting $1.4 billion. Bank officials won't announce first-quarter earnings until April 15, but said they intend to slash quarterly dividends from 15 cents per share to 1 cent, a move that will preserve $490 million in capital a year. WaMu announced an agreement to raise $7 billion through the sale of equity securities in order to maintain the bank's capital ratios. The company raised $1.54 billion through the sale of 176 million shares of common stock at $8.75 per share, and plans to raise another $5.5 billion through the issue o...