SEATTLE- Washington Mutual Inc. (NYSE:WM) said it would lay off 110 employees in Colorado and close three home loan centers in the state as part of a nationwide cutback.

The Seattle-based savings and loans will close its Westminster, Greenwood Village and Colorado Springs home loan offices, said WaMu spokeswoman Missy Latham.

Nationwide, it plans to lay off 2,600 home loan employees and close 190 of 336 home loan and sales offices. WaMu also will eliminate about 550 corporate and support services jobs. It said it will discontinue making subprime loans.

WaMu increased its fourth-quarter loan losses provision to $1.6 billion, and predicted a provision of up to $2 billion for the first quarter 2008. 

Looking to raise some money, WaMu announced a convertible preferred stock offering worth about $2.5 billion. It also reduced its dividend rate to 15 cents per share, from 56 cents per share. The two actions are expected to bring in about $3.7 billion.

The company issued a bearish forecast for its 2008 mortgage business.

"The mortgage market is undergoing a fundamental shift due to credit dislocation and a prolonged period of reduced capital markets liquidity," the company said in a press release. "As a result, WaMu expects national mortgage originations to shrink to $1.5 trillion in 2008, down about 40 percent from an estimated $2.4 trillion this year."