Mortgage Defaults Prompt National City To Cut Jobs, Dividend

Cleveland–Following the lead of other regional banks, Cleveland-based National City announced Wednesday it would cut its dividend and fire employees in the wake of the mortgage market chaos,Forbes reports.In the third quarter, National City’s mortgage business–plagued by rising customer defaults–lost $152 million, reducing the company’s profits by 80 percent from 2006.As a result, National City has reduced its mortgage offerings. On Wednesday, the bank announced it would eliminate 900 employees from National City Mortgage.National City stock also has suffered from its subprime woes. Shares tumbled 56.5 percent in the past year, leaving an unusually high annual dividend yield of more than 10 percent.