Connecticut's Webster Bank Exits Wholesale, Correspondent Channels
Waterbury, Conn.-based Webster Bank NA said Friday that it will shutter both its wholesale and correspondent banking channels, as part of plans to "streamline and reorganize" its mortgage banking operations. The Associated Press reported that the New England bank funded $3 billion in mortgage loans during 2006, and that it operated wholesale offices in Connecticut, Chicago, Phoenix and Seattle. No information on the expected number of affected employees was provided, although the bank said a reduction in staff would take place by the end of February 2008. In spite of its exit from other origination channels, Webster said that it expects "continuing growth" in its retail mortgage banking activities. Many banks have exited wholesale lending in 2007, under the perception that quality control in wholesale lending was problematic and led to a decline in the performance of brokered loans when compared to loans originated directly via the retail channel.