With interest rates reaching 14-year highs and credit activity well below the peaks of the past two years, layoffs and closures occur with alarming frequency. Other lenders that have reduced staff this year include JPMorgan Chase, Wells Fargo, Movement Mortgage and Nationstar Mortgage, also known as Mr. LoanDepot was one of Massachusetts's top lenders last year, ranking sixth in total number of home loans processed and fourth in refinancing. Purchasing-focused lenders that didn't increase in size to attract refinancing businesses during the boom, in particular, are looking to hire loan officers.
But despite the worst business climate in more than a decade, there are mortgage companies that hire workers and think opportunistically about the cycle. The Wisconsin-based lender issued the third highest number of residential purchase loans in Massachusetts last year and the seventh highest number of refinances. The mortgage company, which had processed 120 loans this year for Massachusetts borrowers, notified the state of Texas that 428 employees were laid off in June. That's changing now that the average rate for a 30-year fixed mortgage exceeds 6 percent, the first time in more than a decade.
Mortgage Network executives will continue to observe the effects of rising interest rates and changes in the economy, Koss said, adding that if the company ultimately reduces staff, layoffs would be limited to 2 percent to 3 percent of employees. To meet demand, Lazowski said, lenders took steps such as hiring more staff than would normally be needed for certain functions, hiring less experienced employees and paying higher salaries. Rocket Mortgage, the country's largest mortgage lender, has avoided layoffs, but has still offered a voluntary purchase to at least 8 percent of the company's employees. Like other lenders, its mortgage activity in Massachusetts fell during the first six months of the year, including a 69 percent drop in refinancing compared to the same period last year.
Mortgage Network, a private company, used overtime and employee incentives to manage volumes over the past two years, said Koss, the company's national production director. Mortgage lenders are hit hard by rising interest rates, as refinancing requests and requests tend to fall before the The mortgage company published a plan in July called “Vision 2025” to address market conditions and position the company in the long term, reported the company in a statement. Wemlo, a platform that connects mortgage brokers and loan originators to a processing network, seeks to expand. Meanwhile, requests for mortgage refinancing are down nearly 80% from a year ago, according to the group.
Major brokerage firms, mortgage lenders and real estate technology companies have announced varying degrees of layoffs in recent months and experts expect the trend to continue.