Cal Fed Mortgage Lays Off 226 Workers : Will Close 14 Offices in Two States; Cites Drop in Loan Demand

In an economy move, Cal Fed Mortgage in Los Angeles is laying off 226 workers, more than 60% of its work force, a company spokesman confirmed Tuesday.

The mortgage-lending firm is a unit of California Federal Savings & Loan, one of the nation’s five largest thrifts. Cal Fed Mortgage said it is making the cuts because its loan demand had dropped from peak 1986 levels and to avoid duplication with California Federal Savings’ lending operations.

Cal Fed Mortgage has 14 offices in California and Arizona that will either be closed or merged with California Federal Savings offices. That will leave the firm with four remaining offices in New York, Connecticut and New Jersey.

22,000 Loans

The cutbacks are expected to save California Federal Savings $13 million a year in operating expenses.

The move was accompanied by the resignation of Richard L. Mower, who had been president and chief executive of Cal Fed Mortgage. He has resigned “to pursue other interests,” a Cal Fed spokesman said. Mower was replaced by Vijay V. Yajnik, who had been executive vice president.

Cal Fed Mortgage has 22,000 loans in its portfolio that are worth about $1.3 billion. The firm keeps its adjustable-rate loans and sells its fixed-rate mortgages into the secondary market.