Cost Cutting Spreads Across the Mortgage Sector.

Washington -- Slapped sober by weaker profit margins and declining originations, mortgage bankers of all stripes are engaging in a mini-tsunami of cost cuts the likes that haven't been seen since the doldrums of 2000.

Last month, Washington Mutual of Seattle became the poster child of mortgage cost cutting, announcing that it is slashing its mortgage workforce by a stunning 19% (2,500 jobs), while closing 10 processing sites.

The job cuts at WaMu are - by far - the largest known layoffs by any mortgage firm during the recent industry downturn.

The only lender that has made cuts close to WaMu's is Ameriquest Mortgage of Orange, Calif., which along with its wholesale division, Argent, recently trimmed 1,400 jobs.

Industry executives told Mortgage Servicing News that rumors of layoffs and office closings are becoming the norm.

It also appears that Southern California, where many nonprime lenders are headquartered, is bearing the brunt of the cutbacks.

A recent e-mail sent out by the Newport Beach office of Grubb & Ellis estimates that 500,000 square feet of office space in the Anaheim area will come back on the market because of mortgage-related cutbacks.