WaMu Cuts 22% of Loan Jobs, Exits B&C

Washington Mutual, once a powerhouse in the mortgage industry, says it will trim 22% of its home loan staff, eliminate its subprime channel, and take a whopping $1.6 billion writedown in the fourth quarter.On Monday afternoon the nation's largest thrift also said it would raise $2.5 billion in new capital through a convertible preferred offering and slash its dividend by 73%. The Seattle-based WaMu said it remains committed to the mortgage business but noted that the industry is undergoing a "fundamental shift due to credit dislocation and a prolonged period of reduced capital markets liquidity." In total, it is eliminating 3,150 jobs, including 2,600 in its mortgage group. As previously reported, it is also closing its warehouse division. In response to the latest announcement, Fitch Ratings downgraded the long-term issuer default ratings of WaMu and Washington Mutual Bank from A to A-minus, and downgraded various other ratings of WaMu and its subsidiaries. In trading Tuesday morning, WaMu's stock was down 9% to $19.88 a share.