Mortgage industry faces more cuts

But mortgage banking operations must dig deeper, FBR Research analysts said, in a report released this month. Mortgage-related employment has fallen 20 percent in the past year and now stands at 410,000 jobs, according to FBR, citing the latest available government figures. But companies need to shrink by another one-third to reach a level where they can hope to make a profit, the research report said. “In our view, the industry is still not downsizing fast enough,” FBR said.

“We expect further declines in employment to align mortgage employment with lower industry origination volume.” FBR lowered its latest mortgage volume forecast in 2008 to $1.8 trillion, down 18 percent from its earlier projection, which was already down at a double-digit pace from last year. Washington Mutual Inc. became the latest to announce job cuts this month.

It plans to shutter three home loan offices in Central Florida and lay off 30 workers, as part of a nationwide downsizing that is expected to eliminate more than 3,000 jobs. Amid its battle with the global credit crunch, Marshall Ilsley Corp. — the parent of M I Bank — has drawn a lower stock rating from Deutsche Securities, the brokerage said recently.