Bank of America may be plunging deeper into the mortgage business by purchasing Countrywide Financial, but the rest of Wall Street is getting as far away from home loans as they can.
Yesterday, Morgan Stanley said it will eliminate 1,000 jobs by scaling back its US residential mortgage business and closing the Advantage Home Loans unit in the UK.
“Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward,” Anthony Meola, chief operating officer of the US residential business, said in a statement.
This year, Morgan Stanley has said it will cut 2,000 jobs from areas that offered mortgages, packaged and traded debt securities and provided high-yield loans.
The company also said in October it was eliminating about 300 trading and banking jobs in the securities division.
The firm will continue its mortgage-servicing business, Saxon Mortgage Service, and offer loans to retail brokerage clients.
Wall Street has eliminated at least 19,000 jobs in the past six months. Lehman Brothers recently announced it would “substantially” reduce its US residential-mortgage lending. To date, some 3,800 mortgage jobs have been lost at the firm.
Morgan Stanley, led by John Mack, bought Advantage in December 2005, joining Lehman Brothers and Merrill Lynch in setting up units making home loans to UK borrowers and packaging them into securities. The bank also bought mortgage lenders in Italy and Russia.