The U.S. mortgage meltdown is roiling Pittsburgh's western suburbs in unexpected ways. Jobs, not homes, are being lost.

Pittsburgh-area companies eliminated 1,590 mortgage-lending and consumer finance positions between the end of 2005 and the end of 2007 -- the 10th highest drop among any metro area in the country, according to Moody's Economy.com.

Many of those layoffs occurred along the Parkway West, in towns such as Moon and Robinson, Coraopolis and Green Tree, where companies have aggregated to provide appraisals, title insurance, closing and deed preparation services for mortgage lenders nationwide. With subprime defaults cascading in certain parts of the United States and big lenders struggling, some of these local companies have gone out of business altogether, while others are making do with leaner staffs in an industry that during its height earlier this decade employed 5,500 people locally and generated gross revenue of $1 billion, according to a local trade group.

The local drawdown of jobs and companies also is putting additional pressure on landlords up and down the Parkway West, where 19.5 percent of the office space currently sits empty, the highest vacancy rate of any submarket in the metro area.

"By no means is Pittsburgh out of the woods in regards to the fallout from the tightening in credit conditions," said Ryan Sweet, an economist with Moody's Economy.com, in West Chester, Pa.

Recent departures include:

• Woodbury, N.Y.-based Delta Financial Corp. and Melville, N.Y-based American Home Mortgage, both of which filed for bankruptcy late last year, leaving more than a floor and a half empty at Green Tree's Foster Plaza.

• At Parkway Center, also in Green Tree, locally-owned Express Financial Services filed for bankruptcy last fall and closed its doors, eliminating more than 100 workers at a company that once employed 400 to 500 and had branch offices from Tampa to Cincinnati.

• At the Airport Office Park in Coraopolis, Irvine, Calif-based New Century Mortgage Corp. filed for bankruptcy last spring and eliminated 112 jobs, according to a filing with the state. A spokesman said it let go 70 employees at the Airport Office Park in May and in June closed a second office at Foster Plaza in Green Tree, eliminating 10 more people.

• In Kennedy, locally-owned National Real Estate Information Services laid off at least 108 people last fall and informed the state that it would fall significantly short of the 1,105 new jobs it pledged to create by the end of 2007 in exchange for $3.2 million in state incentives. The state is now in the process of asking the company to pay back a $500,000 opportunity grant -- the only state money received thus far by the Kennedy provider of settlement services.

• And in Downtown Pittsburgh, Milwaukee-based Fiserv Inc. laid off 125 last December at a Grant Street office that served clients dealing primarily in subprime mortgages, the remnant of a locally-owned operation once known as General American Corp. (Fiserv purchased General American earlier this decade). It consolidated the office with another location in Connecticut, according to a spokeswoman. The employees were notified in October and worked through the end of 2007.

But not all mortgage servicers in the Pittsburgh area are retreating.

Jacksonville, Fla.-based Fidelity National Financial Inc. still operates Hopewell-based ServiceLink and Moon-based LSI Fidelity, both of which were founded by Pittsburgh-area entrepreneurs. In fact, the founding of LSI predecessor Lender's Service in 1978 is viewed as a significant moment for the mortgage-settlement industry. Lender's founder and Pittsburgh entrepreneur Robert W. Murphy Jr. created a one-stop shop where lenders could obtain appraisals and other services when needed, and he was among the first to prove that a company could do appraisal management from Pittsburgh for settlements halfway around the country.

From the ranks of Lender's emerged Fran Azur and Ray Pronto; Mr. Azur founded another Coraopolis mortgage-servicing company called ATM Corp. in 1993, while Mr. Pronto founded ServiceLink in 1997. Last year ServiceLink purchased ATM, and some ServiceLink executives moved to ATM's headquarters at the Airport Office Park to clear up more room for growth in Hopewell, according to a source familiar with the matter. ServiceLink received a pledge of $1.15 million from the state in 2004 to create 300 new jobs; as of Jan. 1, 2006, it had created 147 jobs and received $294,000 in tax credits. More recent information was not available. A ServiceLink spokeswoman could not be reached for comment.

Another mortgage entrepreneur apparently surviving the U.S. meltdown is Chuck Sanders, founder of Urban Settlement Services, who said he is benefitting from "the layoffs of our competitors."

In fact, "we are in a hiring mode."

For that he credits a "preferred vendor" relationship with Charlotte, N.C., banking giant Bank of America, which relies on Urban Settlement to provide title, appraisal and loan closing assistance, and strong relationships with Citizens Bank, PNC Financial Services Group and Wachovia Corp.

And there are other reasons for optimism. Even with the recent job losses, the Pittsburgh area is still home to 26,900 finance jobs spread across banks, mortgage brokers, consumer credit operations and the like. Plus, southwestern Pennsylvania largely has been spared the mortgage defaults, sales and price declines plaguing big cities in Florida, California, Texas, Ohio and Michigan (although Allegheny County does have 457 foreclosed homes with more owed on the home than the mortgage is worth, according to RealtyTrac and Forbes.com, placing it 49th among the 50 U.S. counties with highest shares of "negative equity").

But gone, at least for the moment, is the expectation that the mortgage service industry can be a major driver of new jobs in the Pittsburgh area or a major recipient of public assistance, as it was in 2004 when the state targeted companies in that sector with tax credits and job training assistance as a way of "strengthening the cluster," said state economic development secretary Dennis Yablonsky at the time.

"I have to believe that every real estate settlement service company is experiencing first-hand the downturn of the mortgage finance industry," said Jeff Schurman, president of Moon-based Title/Appraisal Vendor Management Association, a trade group formed in 1998 by seven Pittsburgh companies involved in the mortgage settlement industry. "I'm hearing that business volumes are [down] anywhere from 15 percent to 40 percent among the companies that remain ongoing concerns."

"The good news?" he added.

"I'm hearing that the recent Fed rate reduction has caused a spike in orders," Mr. Schurman said.