The parent company of Ameriquest Mortgage Co. and Town & Country Credit said Tuesday it will close 229 branch offices and lay off 3,800 employees nationwide as part of a plan to consolidate its retail mortgage lending operations.
The job cuts amount to a one-third reduction of ACC Capital’s work force of 11,000, media reports said. All branch offices of Ameriquest and Town & Country will be closed, with operations consolidated in several large regional locations.
The move continues a series of mortgage industry layoff announcements. In February, Washington Mutual said it would close 10 of its 26 home-loan processing centers, eliminating 2,500 jobs.
“We are launching a new strategy for our retail mortgage business – one that will enable us to offer a broader array of competitively priced products and higher-quality customer service,” said Aseem Mital, chief executive officer of ACC Capital Holdings, Ameriquest’s parent company, in a statement.
“We are moving strategically and decisively to remain a leader in an industry that is undergoing fundamental changes,” Mital said.
The branch closures are effective immediately, ACC Capital said.
Under the new retail business model, ACC Capital will centralize its retail branch network into existing regional mortgage production centers in California, Arizona, Illinois and Connecticut, the company said. In addition, the company will consolidate many corporate functions at its Orange, Calif., headquarters. Through its existing regional production centers, Ameriquest will continue to lend nationwide, ACC Capital said.
“Although difficult, the decisions announced today are the best strategy for improving our cost structure and increasing our ability to price loans competitively – changes that are critical to our long-term success,” said Adam Bass, vice chairman. “We greatly appreciate the contributions of our associates affected by today’s announcement and have taken care to assist them in their transition.”
The new business model fully adheres to the company’s previously announced agreement with the states, ACC Capital said. “The strategy and business practices of our new retail model are well-aligned with our commitment to consumer friendly lending policies and with the business enhancements included in our Multi-State Agreement,” said Bass.
Ameriquest’s regional production centers will assume the current loan pipeline and use existing capacity to begin originating new loans immediately, the company said. The centralization allows Ameriquest to retain and maximize its primary sources of new loans, reduce infrastructure costs and eliminate redundant functions, according to the company.
“Our new centralized approach creates an extremely efficient and scalable lending platform, which will increase our long-term competitiveness in a very cyclical industry,” said Mital.