Washington Mutual, the nation's third-largest mortgage originator, has hired the head of Citigroup's home-lending unit to run its home-loan...
Washington Mutual, the nation’s third-largest mortgage originator, has hired the head of Citigroup’s home-lending unit to run its home-loan business.
WaMu’s mortgage unit was once a darling of the industry but ran into trouble last year because of high costs, losses in its hedging program and a sluggish mortgage market.
David Schneider, 39, fills a vacancy left open at WaMu for several months after Craig Chapman shifted to focus solely on the Seattle-based thrift’s commercial business.
Schneider’s appointment marks the last big piece of a management shake-up that began with Steve Rotella being hired as chief operating officer in December. He will report to Rotella and begins work Aug. 8.
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Schneider ran CitiMortgage, which is the country’s sixth-largest mortgage originator, according to National Mortgage News. CitiMortgage, part of New York banking behemoth Citigroup, is based in St. Louis.
“He’s going to continue to build on the momentum we have in home loans,” Rotella said. No acquisitions are planned in that area, he said.
Last year, WaMu faltered in the mortgage business, partly because it had neglected to mesh the mortgage-computer systems of various companies it had bought. That led to higher costs, which contributed to a second-quarter 2004 loss of $63 million in the mortgage-banking area, down from a profit of $489 million a year earlier. In the first quarter 2005, income in mortgage banking was $243 million.
“Washington Mutual is a company that grew extremely rapidly,” said Frederick Cannon, a bank analyst with Keefe, Bruyette & Woods in San Francisco. “In the initial phases of growth, they were running the company with people who had been executives at much smaller companies.”
Now, WaMu appears to be making an effort to pull in people who have run businesses at larger companies, Cannon said. Chase Home Finance, which Rotella headed, is the country’s fourth-largest mortgage originator.
Before joining CitiMortgage in 2001, Schneider was executive vice president of retail banking for Old Kent Financial in Michigan, now part of Fifth Third Bancorp in Cincinnati.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org