HomeStreet Inc., the parent company of HomeStreet Bank, said it is consolidating its mortgage banking operations as loan origination volume and profit margins have declined in recent periods in the single family mortgage market.
The Seattle-based banking company will close, consolidate, or reduce space in 19 single-family home lending centers in Arizona and California, including primary and satellite offices and at one regional processing center.
As a result of these closures and consolidations, approximately 127 full-time equivalent mortgage bankers are expected to be terminated. The number represents 10% of the total headcount for the segment as of March 31. The company already notified all affected employees of the pending terminations.
The company expects to book one-time charges of nearly $10 million on a pretax basis: a $6.5 million charge in the second quarter related to lease terminations and the write-off of fixed assets and tenant improvements at 11 home lending centers; and a charge of $2.8 million related to lease terminations and the write-off of fixed assets and tenant improvements at seven locations and a $428,000 severance charge in the third quarter.
The company expects $13.1 million in total annualized pretax expense savings related to the mortgage banking streamlining.