Hello, LOs!
Some lenders cut jobs in the second half of 2021 in preparation for higher mortgage rates and reduced refinance volume. The rate increases are here, and some of those same lenders are making further cuts.
Mortgage rates on purchase loans reached 5.10% last week, compared to 2.98% a year ago, according to the latest survey from Freddie Mac. The toll on refinances is dramatic: Refi volumes dropped by 71% year-over-year, according to the Mortgage Bankers Association.
As the market contracts, lenders Interfirst Mortgage Co. and Better.com are implementing their second and third round of layoffs, respectively.
Rosemont, Illinois-based Interfirst is cutting 140 additional employees in May. The company had issued pink slips to over 350 non-commissioned LOs in November, representing more than half of the staff, according to former employees.
Michael Nierenberg, CEO of New Residential Investment Corp., which has had layoffs of its own, predicted there will be further reductions across the industry.
"You got to create more efficiency, but you're going to see headcount getting smaller across the industry," Nierenberg said on Tuesday in a call with analysts.
Newrez laid off 386 employees since the acquisition of Caliber Home Loans in August 2021. "We don't want to be those folks," Nierenberg said, of companies that have trimmed their headcount. "But we need to get our business running."
LOs are the main targets of layoffs. Many seasoned LOs recall layoffs in previous market downturns. But others have only known the hiring sprees of the past few years.
Whether a veteran or a rookie, how are you dealing with successive layoffs in the industry? How do you maintain productivity amid the turbulence? Please share your strategies for navigating a shrinking mortgage market at flavia@hwmedia.com.
Flávia Furlan Nunes
Mortgage reporter, HousingWire
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