WaMu workers surprised, angered at lending-center layoffs

Employees reacted with shock, anger and tears to Washington Mutual's announcement Tuesday that it will lay off 3,000 workers and close its home-loan centers, while local mortgage brokers said they are surprised and concerned the company will no longer accept loans from them.

"It's just sickening," said a longtime WaMu employee in southern Washington who is being laid off.

She and her co-workers moved back into their office last week after several months of working in temporary quarters and wondering if they would be moved or let go.

"We were just getting back to business, and now we're not," she said.

Others saw it coming, particularly in areas hit hard by the mortgage crisis.

"The Florida market is really bad," said one home-loan worker in that state who is being laid off from a mortgage company for the third time since 2005.

WaMu, which had 336 home-loan centers before closing some last year, said Tuesday the rest would be shut. In another retrenching move, the company cut its dividend from 15 cents to a penny as it struggles with billions of dollars in bad mortgages.

The Florida employee said she'd like to leave the industry but "I'm 58, and I've got a house and car payments to make and parents who have Alzheimer's, and I don't know what else to do."

A Seattle-area loan officer who is being laid off after a decade at WaMu said he and others are angry at upper management.

"On April 1, they told the big producers that we're solid, we're good, we want to keep you, and less than a week later, you're gone," he said.

"The loans we do did not cause their problem," he added, saying that people in WaMu's conventional-lending business are paying for missteps the company made with subprime loans, which were given to people with poor credit.

Dave Erickson, president of the Washington Association of Mortgage Brokers, said he is surprised that WaMu will no longer supply loans through mortgage brokers. He predicted borrowers will be affected.

"To the extent that there are fewer places to get money, borrowers are hurt somewhat," said Erickson, who owns Mortgage Broker Associates in Lynnwood.

The impact will be blunted, however, because the troubled mortgage giant recently has stopped or greatly reduced some of its mortgage offerings.

WaMu had "already gotten out of subprime loans, gotten out of construction loans, and the niche products have been greatly disappearing," Erickson said, mentioning option ARMS, those adjustable-rate mortgages that offer a choice of payment plans.

Still, Erickson is confident choice remains for borrowers.

"There are still about 80 or 90 percent of the market remaining. WaMu had a big chunk, but there are others with big chunks still out there. So there are still plenty of competitive products at good prices remaining," Erickson said.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com