Layoffs, acquisitions, mergers – NMP


Mortgage professionals in all branches of the industry have benefited enormously from the housing boom over the past few years, and in the meantime some companies have boosted their in-house technology and automation to improve productivity. But all good times come to an end. Now that mortgage rates are on the rise, prices have reached astronomical levels and demand is falling dramatically, business should take a nosedive. Mortgage professionals have now entered the land of acquisitions and layoffs.

The main drivers of this market consolidation are the dramatic decline in refinancing activity nationwide and the decline in the number of eligible buyers as more and more people are shut out of the market. Last winter was a real kick in the teeth for loan officers across the country, with layoffs starting just before Christmas., Interfirst and Freedom Mortgage are among the first to make major layoffs. cut 9% of its staff, which the CEO announced during a Zoom call in December. Interfirst Mortgage laid off 77 employees in Charlotte, including loan originators, national account managers, retail sales managers, transaction coordinators, among others.

Although Freedom Mortgage experienced significant growth over the past year, acquiring JG Wentworth Home Lending and RoundPoint Mortgage Servicing, the company still laid off 171 employees in California and closed its mortgage servicing office in the state. . More recently, layoffs swept through the Fort Mill, South Carolina, office last Friday, according to people familiar with the matter.

Let’s not forget that Zillow fired a quarter of its real estate company after its “iBuyer” house flipping deal failed and left the company with $421 million in losses.

Acquisitions aren’t so scary until senior executives start mentioning strategic reviews. That’s what happened to Stearns Wholesale Mortgage just a year after being acquired by guaranteed rate. At first, Stearns Wholesale was acquired to boost retail loan originations, but after strategic review, Secured Rate executives decided it was best to discontinue third-party wholesale originations and shut them down, laying off 348 employees. .

Not all acquisitions are bad news for the acquired party. Real estate giant Redfin announced in early January that it would pay around $135 million in cash to buy Bay Equity Home Loans, according to multiple sources, a lender that operates in 42 states and employs 1,200 people. However, cuts will have to be made – Redfin will reduce investments in lending software and lay off 121 people as part of the deal. Bay Equity will not, however, terminate any employees.

More layoffs and acquisitions should be on the horizon, according to industry experts. Wells Fargo saw mortgage production drop 8% in 2021, issuing 27% fewer loans to homebuyers in the same year it closed 270 branches and laid off 16,000 employees, according to a report by Inman. Wells Fargo was known as the nation’s largest provider of buy-to-let mortgages in recent years, but Rocket Companies CEO Jay Farner aims to overtake Wells Fargo in the next 12 to 18 months.

Rookie loan officers who entered the industry amid the pandemic housing boom were flying high with growing demand acting like the wind down their winds, but flying too close to the sun can burn you. Loan officers will now learn what it’s like to sing for their supper as the market continues to contract, probably wishing they hadn’t spent that signing bonus so quickly.

Sources who spoke to Housingwire said concerns about layoffs were growing at Fairway Independent Mortgage, but also said loan officers can be more confident working with a more stable brick-and-mortar store rather than a tech company. financial.

Data from the Mortgage Bankers Association (MBA) and Peers Strathmore Group shows that loan officer turnover is highly vulnerable and/or dependent on market conditions. The turnover rate hit an all-time low of 21% in 2020, when industry volume reached $3.8 trillion. Yet, in years with lower origination volume, such as 2007, 2010-2011, 2014, and 2018, the turnover rate increased. At the start of the Great Recession in 2007, loan officer turnover peaked at 51%.

Furthermore, the survey shows that the turnover of loan officers fluctuates according to the types of businesses. Currently, banks have a lower loan officer turnover rate than independent companies by 13%. In 2007, the self-employed turnover rate reached 77% for loan officers. By comparison, bank loan officer turnover never exceeded 50% throughout the crisis. The MBA speculates that this disparity is due to differing management approaches, corporate culture, licensing requirements, incentive compensation, as well as the availability of product offerings and pricing parameters.

For a full list of mergers, acquisitions and layoffs for 2021 leading into 2022, check out TheTruthAboutMortgage.


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