Firm to Shut Branches, Focus on Direct Lending

Principal Residential Mortgage Inc., Des Moines, Iowa, has announced that it will close its retail branch offices by Feb. 28 and concentrate its loan origination business in its Mortgage Direct telephone and online operation.The company said it will continue to expand its correspondent, wholesale, and servicing businesses. The change will have no effect on customers with existing loans, and loans being processed in retail branches will be handled as usual, with as many as possible being closed by the end of February, the company said. Paul Bognanno, president and chief executive officer of Principal Residential, said consumers "recognize the cost advantages associated with getting their loan via the phone or online, as demonstrated by the more than 300% growth experienced by our Mortgage Direct operation in the first nine months of 2002." In that period, loan production rose 17%, and 90% of the growth came from the correspondent, wholesale, and Mortgage Direct distribution channels, he said. The company can be found online at http://www.principal.com/moreinfo/mortgagedirect.htm.