National City laying off 1,300 to scale back mortgage business

[The Straight Story]

National City laying off 1,300 to scale back mortgage business

NEW YORK (AP) -- National City Corp. said Thursday it is laying off 1,300 workers to shrink the bank's struggling mortgage business.

The Cleveland-based bank said scaling back its home lending businesses and shifting the mortgage loans on its books will cost about $200 million before taxes.

National City said it is cutting back on issuing home loans the bank cannot sell to government agencies like Fannie Mae and Freddie Mac. Demand for mortgage debt not guaranteed by a government-sponsored enterprise has rapidly dried up in the past six weeks.

The bank also will suspend issuing home equity loans through brokers. Its home equity unit and mortgage unit will be combined into one subsidiary.

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[Purveyor]

1. I heard this morning that Countrywide is laying off another 900 also. n/t