E-Trade Financial said yesterday it would exit the wholesale mortgage business and that it set aside $245 million for bad loans in the second half, reports the Associated Press. The company, which has been feeling the pinch caused by defaults in the subprime mortgage market, also said that it will set aside another $100 million for troubled asset-backed securities. E-Trade’s chief executive, Mitchell Caplan, also offered a sobering opening of what’s to come for the market.
“What we're seeing in the marketplaces in respect to loans and securities is that this situation will continue aggressively through the later half of this year and all of next year,” said Caplan. “By the time you get to 2009, you will see things better on the macro-economic side - and by then we have dramatically transformed our balance sheet.”
Click here to read the story from the Associated Press on Forbes.com