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Wescom CU pulls out of wholesale mortgage lending
PASADENA, Calif. (1/8/08)--Wescom CU has elected to exit the wholesale lending business for residential real estate loans, effective immediately. The $3.853 billion credit union made that statement in a letter to its mortgage brokers on Dec. 12, noting that it made the decision "after careful consideration." Wescom told brokers that rate locks would no longer be accepted but that the credit union "will honor existing loans in our pipeline. Loans that have been locked will continue to be processed and underwritten according to our normal procedures. Approved loans will be funded as usual." The letter was posted on The Mortgage Lender Implode-O-Meter website. Several credit unions have said that losses related to the subprime mortgage lending crisis have affected traditional loan portfolios. Some credit union members who took out subprime loans elsewhere are now going delinquent on their other loans. According to Credit Union National Association statistics based on National Credit Union Administration Call Report data, the credit union had more than $1.175 billion in mortgage loans and more than $1.928 billion in other loans, with a delinquency ratio of 0.8. News Now contacted the credit union with questions about trade press reports regarding a number of layoffs, including the wholesale mortgage department. The credit union did not reply.
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