National City trims mortgage loan jobs
National City Corp. eliminated about 50 mortgage loan jobs at Allegheny Center, North Side, on Tuesday, the first workday of the new year, informing employees as they showed up for work.
The layoffs came after National City completed the $1.3 billion sale of its subprime mortgage business -- First Franklin, of San Jose, Calif. -- to Merrill Lynch & Co., New York, on Saturday. First Franklin originated about $18 billion in subprime loans, which are loans to homebuyers with financial problems, handled by National City.
Also included in the sale to Merrill Lynch was a local loan servicing arm, National City Home Loan Services, based in Allegheny Center, which processes mortgage payments, taxes and related documents for about $38 billion worth of subprime loans. National City Home Loan Services employs 300 at Allegheny Center, plus 356 at a call center along Boyce Road in Upper St. Clair.
Not included in the deal was another National City unit at Allegheny Center, called Preferred Advantage, which also originated subprime loans. Because it was not included in the sale to Merrill Lynch, National City decided to close the unit Tuesday. As a result, National City cut "less than 50" jobs, said spokesman William Eiler, who declined to provide specific numbers.
When the deal was announced in September, Merrill Lynch said it expected to keep all three units and essentially all the jobs.
Neither Eiler nor a Merrill Lynch spokesman would say which company removed Preferred Advantage from the deal. Eiler declined to say why National City did not give advance notice to the workers. As a result, workers with as little as 12 weeks' service who do not find other positions within National City will get severance benefits, he said.
"We see this as a growth business and going forward we expect to maintain, if not grow, the number of jobs at Home Loan Services," said Merrill Lynch spokesman Bill Halldin. Merrill Lynch will use the Home Loan Services name for the units it acquired, he said.