E-Trade Exits Wholesale Mortgage, Revises 2007 Guidance

E-Trade Financial announced today that it was exiting wholesale mortgage as part of its move to return to "core businesses" that benefit its retail customers. The company is also upping its amount of loan loss reserves as a result of "charge-offs expected as a result of the disturbance in the credit markets." The aggregate loss reserve provision is $245 million. From the release: With this additional reserve, allowance for loan losses as a percentage of non-performing loans is expected to increase to 75 percent based on assumptions for the second half of the year, up from 45 percent on June 30, 2007. Within home equity loans, where the Company and the marketplace have seen the most significant stress, the coverage will be approximately 100 percent, up from 51 percent as of June 30, 2007