65 HomeFed Executives to Lose Jobs
HomeFed Bank has told 65 mortgage loan executives that their jobs will no longer exist by April 1, part of the savings and loan’s previously announced plan of cutting payroll by 150 positions over the next two to three months.
Those losing their jobs work mainly out of nine special offices around the state and market HomeFed single-family mortgages to real estate brokers. An undetermined number of the offices will be closed, HomeFed executives said.
Some of the 65 loan executives will be redeployed in other HomeFed jobs, but S&L; executives said Friday they didn’t yet know how many.
On Feb. 22, HomeFed announced a $248-million loss for 1990 and that its problem loans had increased to alarmingly high levels. The S&L; also said that, because of the losses and a high percentage of risky loans, its capital would probably fall short of minimum regulatory requirements by July 1.
To trim costs, HomeFed then said it would lay off 150 of its 4,000 employees over the next two to three months. An unspecified number of additional jobs will be cut by attrition, the S&L; said.
HomeFed also said it would try to sell off $2.5 billion in assets over the course of 1991 to conform with capital requirements.
On Friday, HomeFed group vice president Dennis Casey said the layoffs of the loan executives were directly related to a restructuring and reevaluation of the S&L;’s single-family mortgage loan origination process. Indirectly, the layoffs are also connected to HomeFed’s capital problems.
Casey explained that HomeFed has decided to concentrate on making single-family mortgage loans with “high credit quality” that can easily be resold to outside investors, including government-insured agencies.
An advantage of such loans is that they require an S&L; to keep less capital on hand than for loans kept in the S&L;’s portfolio. Such a feature is doubly attractive to HomeFed, which is experiencing capital problems,
To better ensure loan quality, more of HomeFed’s future loan originations will be done at branch locations, meaning that the outside loan offices and employees will not be needed, he said.
HomeFed’s single-family mortgage loan originations declined to about $2.6 billion in 1990 from $3 billion in 1989, a HomeFed spokesman said.
But Casey said the restructuring, rather than the lower volume of new loans, was responsible for the decision to lay off the loan executives.
The HomeFed executives being laid off have begun contacting other mortgage bankers in San Diego. Tom Stickel, chairman of TCS Mortgage, said his firm has had job inquiries from more than a dozen HomeFed executives who said they were losing their jobs.
“We’re hopeful we will be able to accommodate some of them because they are very well trained and very professional,” Stickel said.
