US-based online lending platform E-loan is to quit the mortgage origination business after posting an $87.4 million net loss in the third quarter.
The company, a pioneer in the online lending business, is operated by Puerto Rica-based Popular Inc and its North American subsidiary Banco Popular, which reported a reported a third-quarter net loss of $139 million.
In a statement, the company said the retrenchment of its US banking operations was a response to the economic downturn. Banco Popular intends to shut down at least 40 branches in its 139-strong national network as it seeks to boost its capital position and clean up its subprime-hit balance sheet.
The closure of the E-loan mortgage book to new business is expected to save $37 million annually. The company says E-loan will continue to service outstanding loans, and offer FDIC-insured certificates of deposits and savings accounts.