Chase Home Finance plans to open two new Bay State offices, including this one at 300 Fifth Ave. in Waltham, on Jan. 2. The company will employ 49 former employees of Washington Mutual, which closed its Massachusetts retail operations on Dec. 10.

The local job market is feeling the effects of the subprime mortgage-related fallout, but some employees of imploded or struggling national players still have options.

Chase Home Finance, a division of JP Morgan Chase Bank and Massachusetts’ seventh-largest retail loan originator in 2007, recently offered jobs to 49 of the state’s 53-member Washington Mutual retail mortgage team, who lost their jobs when WaMu shut down its seven Massachusetts lending offices on Dec. 10.

The shutdown coincided with the Seattle-based bank and mortgage lender’s decision to stop offering subprime mortgage products altogether; WaMu’s departure from the retail markets in Boston, Philadelphia and Washington, D.C., where it had no bank branches to begin with; and the layoffs of more than 3,100 company employees nationwide.

In September, WaMu shut down most branches of its dedicated subprime outlet, Long Beach Mortgage, but had continued to offer subprime products.

The Boston Herald first reported Dec. 15 that Chase would be hiring its laid-off Massachusetts staff members. The $720 million in retail loans they originated in 2007 approaches Chase’s $780 million, noted Chase Home Finance New England Region Manager Charles Nilsen, and a repeat performance in 2008 would virtually double the Massachusetts mortgage market share of his company.

At a time when community banks are trying to gain back market share lost to mortgage companies in the past decade, that factor was a key one for Chase.

So when Sean Riley, manager of WaMu’s Newton branch, called Nilsen in November to explain he was looking for options for his team, Nilsen said he decided to meet with Riley and Brenda Parsons, WaMu’s branch manager in Beverly, the next day.

Soon after, his company decided to pay $1.5 million to hire WaMu originators and support staff, and to rent new office space for them in Beverly and Waltham.

Nilsen called it a “calculated bet.”

“These are people with proven track records,” he said – for the most part, they are originators who made $15 million in loans each during the past year. The WaMu employees’ home bases in Boston’s South End, Newton, and the North Shore complement Chase’s strongholds, he added, and their tenure in their jobs – an average of about eight years each – is comparable to Chase’s, making him more comfortable that the new employees will be a good cultural fit.

Riley said he believes the local WaMu shutdowns were a consequence of subprime fallout, even though those offices didn’t actually lend many subprime products.

As a 15-year company employee and the manager of the company’s flagship Newton office since 2003, he explained, he participated in quarterly investor conference calls. Riley said following the shutdown of Long Beach Mortgage, he got a sense there could be more layoffs to come.

Riley and Parsons then decided they would start marketing their entire team to similar local lenders, he said, “and as the rumors [of WaMu closing more offices] intensified, so did our conversations.”

After speaking with four or five other Top Ten lenders, Riley and Parsons decided that Chase would make the best match.

“A big factor was the lack of impact from subprime [lending],” Riley said.

Chase Home Finance “took a cautious approach on subprime and Alt-A [mortgage products], even when it was all the rage,” Nilsen said.

‘A Hard Decision’

The shutdown of the Massachusetts offices means WaMu has completely left Boston, Philadelphia and Washington, where it operated lending offices but no bank branches.

Riley said that while banks like to have a physical presence in as many markets as possible, in this case, his former employer decided that not having banks in the same cities as its lending offices limited its opportunities to cross-sell.

“It was a hard decision [to shut those regions down], made in hard times,” he noted.

Massachusetts Mortgage Bankers Association Executive Director Kevin Cuff said the WaMu story is an important one in the wake of negative news sweeping the industry.

“The fact is, two companies came together during the holiday season and formed something that was good,” he said.

Cuff recently estimated that about one-third of the Bay State’s mortgage company jobs have disappeared since the height of the lending boom in 2005.

“There are somewhere between 20 percent and 30 percent [fewer jobs] than there were then,” he said, attributing most of the losses to shutdowns or downsizings by industry giants such as Mortgage Lenders Network, Summit Mortgage and Countrywide.

Cuff previously has estimated that about 4,000 Massachusetts mortgage industry jobs have disappeared since the fallout.

Massachusetts’ official employment and mortgage licensee numbers don’t tell the same story yet. In August, the state Division of Banks counted 1,711 total state-licensed mortgage broker and/or lender companies. The number is slightly down this month – to 1,665, but still up from the renewal date in May, when 1,501 companies renewed their licenses, and up even further from May 2006, when there were 1,458 company licensees. The next renewal date is May 2008.

The state Department of Workforce Development, meanwhile, has found in random employer surveys that the number of payroll employees in the real estate and banking industries has decreased only slightly in recent years.

Between November 2005 and November 2007, the agency found, employment in those fields decreased from 139,800 to 137,900.

Employment in the Financial Activities sector, in which real estate and banking are included, increased from 222,700 to 223,700 during the same period.

Nonetheless, a number of former mortgage industry employees are deciding to switch to a completely different field, Banker & Tradesman found, anecdotally, at a job fair held during the New England Mortgage Banking conference in October.

The fair, at which many employers were seeking only commission-based originators, had fewer job seekers than participating employers had hoped.

Despite the statistics, Riley said his goal from the start was to get WaMu’s entire Massachusetts team a job. He said he felt like they were in a good position with their proven track record as a group.

And, he added, “it was the right thing to do.”