Prudential’s Mortgage Arm Cuts Staff 23% : Lending: The layoffs are attributed to a drop-off in demand as interest rates have risen.

Facing an increasingly sluggish market for its home loans, Prudential Home Mortgage Co. is laying off 23% of its work force, or nearly 900 people nationwide, including more than 100 at its loan-processing center in Costa Mesa.

The company, a subsidiary of Prudential Insurance Co. in Newark, N.J., had told employees at its four processing centers last month that staff reductions were coming and would be completed by the end of August. Most of those cuts were made Thursday, said William Campbell, a spokesman for the Clayton, Mo.-based subsidiary.

Mortgage lenders across the country have seen their business decline in recent months as interest rates have inched up. An increase in demand for fixed-rate mortgages has not made up for a sharp drop in refinancings.

“It’s simply a matter that the demand has fallen off dramatically in the mortgage industry,” Campbell said.

Prudential Home Mortgage now has about 2,960 workers nationwide, down from 3,830 in July, Campbell said.

The layoffs announced Thursday were at loan centers and other Prudential facilities in New Jersey, Maryland, Pennsylvania and Minnesota as well as California, he said.

Homeowners who have their mortgages through Prudential will not be affected by the layoffs, Campbell said.

“Their loans will still be serviced on a timely basis--it won’t make any difference,” he said.

Staff cuts in the past 10 days at the Costa Mesa facility have reduced Prudential’s staff there to 82 people from 186 a month ago, Campbell said.

The company had already laid off 57 people in Costa Mesa earlier this year as part of a 12% nationwide work force reduction that involved 600 jobs.

Campbell emphasized that the company is not shutting down its Costa Mesa loan facility, which serves the western United States, primarily California. However, Prudential will move to smaller quarters, he said.

The Costa Mesa cuts include a few management personnel but mostly affect loan officers and underwriters, Campbell said.

The layoffs came with four weeks’ notice and a severance package that includes health care benefits, outplacement services and a continuation of benefits for a limited period, he said.