E*Trade Exits Retail Mortgage Origination
E*Trade Financial (ETFC) said in a filing with the Securities and Exchange Commission late Friday that it had exited the retail mortgage origination channel in April 2008, amid continuing troubles with U.S. mortgages -- and mounting losses at the financial services brokerage. On April 17, the company reported a $91.2 million loss for the first quarter as it boosted losses for the mortgages still on its books. E*Trade exited wholesale origination in September of last year, but continued to originate mortgages directly via its retail branches nationwide. Its decision to shutter retail effectively pushes the company out of the mortgage origination business, although the company said that "after we complete the exit of this business, we expect to partner with a third party company to provide access to real estate loans for our customers." No further details were provided, although a source close to the company said E*Trade is likely to simply provide qualified leads to a third party originator. The company said its retail channel had originated roughly $116 million in first-lien, prime credit-quality mortgages during the first quarter, before being shut down. HELOCs are, by far, the largest area of concern for most investors -- E*Trade held $5.6 billion in outstanding lines of credit at the end of the quarter, down from $6.3 billion previously, as the company froze roughly $900 million in credit lines during the first quarter. For more information, visit http://www.etrade.com. Disclosure: The author held no positions in ETFC when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.