WaMu Reorganizes Correspondent Biz

Washington Mutual, Seattle, has shuttered its traditional correspondent purchase channel, shifting that business over to its capital markets group, MortgageWire has learned.Layoffs are involved in the restructuring, but at deadline time a company spokeswoman could offer no guidance on job cuts. The spokeswoman confirmed the change, noting that the thrift's conduit (capital markets group) in New York will continue to buy A-paper conventional loans. She added: "[H]owever, we are shifting our model from a low-margin business to focus on higher-margin A-paper products such as option ARMs and hybrid ARMs." Last week MW broke the news that WaMu production chief Tony Meola had resigned, accepting a position with a competitor. Industry sources say his departure was directly tied to the correspondent reorganization. One production executive at an Iowa lender e-mailed MW, saying, "We just got a call from our correspondent rep from WaMu. They are exiting the business." According to the Quarterly Data Report, WaMu ranks fifth among correspondent buyers.