Mortgage Giant Cuts Thousands Of Jobs—Warns Of ‘Accelerated’ Downturn As Housing Market Abruptly Collapses.
2022 Jul 14, 3:40pm 476 views 8 comments
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1
GNL
2022 Jul 14, 4:29pm
GNL
2022 Jul 14, 4:29pm
How old is this article?
"...mortgage originations projected to decline by about half in 2021, as compared to last year..."
"...mortgage originations projected to decline by about half in 2021, as compared to last year..."
2
Eman
2022 Jul 14, 6:29pm
Eman
2022 Jul 14, 6:29pm
WineHorror1 says
Seems like a typo. Probably meant……about half as compared to 2021, which makes sense. The refinance biz is dead in the water. People are not going to refinance 2.75% mortgages for 5.75%. Hope the layoffs contain in the housing sector and don’t spread to other sectors. 🤞
How old is this article?
"...mortgage originations projected to decline by about half in 2021, as compared to last year..."
Seems like a typo. Probably meant……about half as compared to 2021, which makes sense. The refinance biz is dead in the water. People are not going to refinance 2.75% mortgages for 5.75%. Hope the layoffs contain in the housing sector and don’t spread to other sectors. 🤞
3
Al_Sharpton_for_President
2022 Jul 15, 10:20am
Al_Sharpton_for_President
2022 Jul 15, 10:20am
Sprout Mortgage Shuts Down.
More than 300 employees laid off during a conference call this afternoon.
Sprout Mortgage, which often billed itself as one of the nation's fastest-growing lenders and largest non-QM originators, shut its doors today, according to former employees.
The former employees, who asked not to be identified, said Sprout President Shea Pallante held a companywide phone call this afternoon to break the news to all staff. One former employee said the call originally was scheduled for 4 p.m. EDT, but was pushed back by a half hour, so was held at 4:30 p.m.
Pallante informed the staff, which totaled more than 300 people, that the company would close its doors immediately – including both its retail and wholesale divisions, the employees said.
A company official declined to confirm or deny the shutdown.
The call was held one day before payday, employees said, adding that Pallante offered no severance pay nor other compensation. He also said nothing about what would become of loans in the company’s pipeline.
Employees said they were caught off-guard by the announcement and some described themselves as shell-shocked.
Another former employee who asked not to be named said, "I found out at 1:00 today that I've got over a hundred employees who don't know if they're getting a paycheck tomorrow."
The company was supposed to send out various emails in advance in order to warn employees, but didn't do it, the former employee said, adding that the company was more interested in shutting down everyone's email system within 15 minutes of letting them know than they were about doing anything else.
The former employee said Sprout did a reduction in force of 50 people in April, and another 60 last month, and that there were two investors interested in the company, one who was willing to put up a $25 million investment, another looking to make a preferred stock offering. Both of those potential deals went up in smoke on Friday, the former employee said.
"Jamie Dimon is a smart guy, and when he says that there's a tsunami that's about to rip through the financial markets, he's not kidding," the former employee said.
Sources have also told NMP that Sprout was selling its mortgages to JPMorgan Chase, but with that major financial player reducing its mortgage staff due to the downturn in the housing market, it didn’t bode well for Sprout. Sources also said Sprout’s entire correspondent team was let go two weeks ago and moved over to Oaktree Funding Corp.
Founded in 2016 and based in East Meadow, N.Y., Sprout offered over 30 unique mortgage solutions, along with automation tools, and underwriting services.
https://nationalmortgageprofessional.com/news/sprout-mortgage-shuts-down
More than 300 employees laid off during a conference call this afternoon.
Sprout Mortgage, which often billed itself as one of the nation's fastest-growing lenders and largest non-QM originators, shut its doors today, according to former employees.
The former employees, who asked not to be identified, said Sprout President Shea Pallante held a companywide phone call this afternoon to break the news to all staff. One former employee said the call originally was scheduled for 4 p.m. EDT, but was pushed back by a half hour, so was held at 4:30 p.m.
Pallante informed the staff, which totaled more than 300 people, that the company would close its doors immediately – including both its retail and wholesale divisions, the employees said.
A company official declined to confirm or deny the shutdown.
The call was held one day before payday, employees said, adding that Pallante offered no severance pay nor other compensation. He also said nothing about what would become of loans in the company’s pipeline.
Employees said they were caught off-guard by the announcement and some described themselves as shell-shocked.
Another former employee who asked not to be named said, "I found out at 1:00 today that I've got over a hundred employees who don't know if they're getting a paycheck tomorrow."
The company was supposed to send out various emails in advance in order to warn employees, but didn't do it, the former employee said, adding that the company was more interested in shutting down everyone's email system within 15 minutes of letting them know than they were about doing anything else.
The former employee said Sprout did a reduction in force of 50 people in April, and another 60 last month, and that there were two investors interested in the company, one who was willing to put up a $25 million investment, another looking to make a preferred stock offering. Both of those potential deals went up in smoke on Friday, the former employee said.
"Jamie Dimon is a smart guy, and when he says that there's a tsunami that's about to rip through the financial markets, he's not kidding," the former employee said.
Sources have also told NMP that Sprout was selling its mortgages to JPMorgan Chase, but with that major financial player reducing its mortgage staff due to the downturn in the housing market, it didn’t bode well for Sprout. Sources also said Sprout’s entire correspondent team was let go two weeks ago and moved over to Oaktree Funding Corp.
Founded in 2016 and based in East Meadow, N.Y., Sprout offered over 30 unique mortgage solutions, along with automation tools, and underwriting services.
https://nationalmortgageprofessional.com/news/sprout-mortgage-shuts-down
4
casandra
2022 Jul 15, 10:43am
casandra
2022 Jul 15, 10:43am
I saw this coming. about two years ago I contacted rocket mortgage for my great niece to buy her first house. I Gave them my information. Never heard a peep from them until about two months ago. they call like crazy day and night. if I block numbers they call on new ones. I tell them please don't call I do not need your services or products. they keep calling, leaving voicemails, text messages and emails. I even felt bad cause I began yelling at them not to call. to no avail. when I see "Detroit" calling on my phone I roll my eyes now. They are DESPERATE!
I began to realize they must be going broke. this article backs up what I have been pondering.
GOING BROKE!
A crash is imminent.
I began to realize they must be going broke. this article backs up what I have been pondering.
GOING BROKE!
A crash is imminent.
5
Al_Sharpton_for_President
2022 Jul 15, 10:54am
Al_Sharpton_for_President
2022 Jul 15, 10:54am
A Long List of Mortgage Layoffs, Mergers, and Closures
I first created this list of mortgage layoffs and closures in February 2007, back when scores of mortgage companies were consolidating, laying off employees, sending out scary warnings, and going out of business.
Around that time, some 2.33% of all U.S. mortgages were delinquent, a number which was sure to rise over the following years as the full extent of the mortgage crisis revealed itself.
Between the first and second quarter of 2006 alone, mortgage repurchase requests tripled thanks to shoddy underwriting that was prevalent during that era.
Adding to lender woes were declining home values in almost every metropolitan area throughout the United States, sky-high home prices at time of origination, rising mortgage rates, rampant fraud, a deteriorating secondary market, and unmanageable mortgage payments.
There were some 86,126 mortgage job cuts in 2007, and countless more in subsequent years as major institutions like Bear Stearns, Countrywide Financial, IndyMac, and Washington Mutual all shuttered.
Even though it has been roughly a decade since the downturn began, mortgage companies are still facing the consequences of getting involved in what was then a very risky housing market.
Amazingly, we continue to see layoffs and closures driven by what transpired many years ago. Given how bad things got, this isn’t too surprising.
Recently, mortgage layoffs have been driven by a major decrease in refinance demand and a dwindling pool of eligible home buyers thanks to significantly higher mortgage rates.
I’ve seen a surge of user comments from former mortgage employees who have been laid off. Those can be seen below the list at the bottom of the page.
Simply put, mortgage companies must “rightsize” as too many players chase far too few loans.
List last updated on July 6th, 2022
Latest updates:
Wells Fargo to cut 107 jobs in Des Moines area (7/6/22)
Redwood Trust acquires Riverbend Lending (7/5/22)
AnnieMac Home Mortgage acquires OVM Financial (6/30/22)
First Guaranty Mortgage Corp. files Chapter 11 bankruptcy (6/30/22)
Mid America Mortgage, Inc. to rebrand as Click n’ Close (6/25/22)
First Guaranty Mortgage Corp. cut 428 jobs in Plano, TX (6/24/22)
Barclays to acquire Kensington Mortgages (6/24/22)
Chase to cut 1,000 home lending jobs (6/22/22)
HomeLight acquires Accept.inc (6/16/22)
Notarize let go of 25% of staff (6/15/22)
Compass to cut 10% of its workforce (6/14/22)
Redfin to slash nearly 500 jobs (6/14/22)
Priority Mortgage to merge with Doorway Home Loans (6/10/22)
Wyndham Capital Mortgage to cut 48 jobs in Charlotte, NC (6/9/22)
Real Genius (FirstBank) laying off 74 employees in Charlotte, NC (6/2/22)
Tomo cuts 44 jobs (6/1/22)
Real Genius (FirstBank) laying off 35 employees in Nasville, TN (5/31/22)
Panorama Mortgage Group acquires Rely Home Loans (5/31/22)
Wells Fargo cut roughly 90 mortgage jobs in Des Moines area (5/24/22)
Nationstar Mortgage (Mr. Cooper) cutting 120 jobs in Santa, Ana CA (5/20/22)
Mid America Mortgage to sell its retail channel to Legend Lending (5/16/22)
Panorama Mortgage Group acquires Vision Mortgage Group (5/13/22)
Intercontinental Exchange (ICE) to acquire Black Knight, Inc. (5/4/22)
Costco Mortgage program no longer available as of May 1st, 2022 (5/1/22)
Pennymac to cut 45 jobs in Pasadena, CA
Mr. Cooper cut roughly 250 jobs during Q1 2022
Planet Home Lending to acquire Homepoint’s correspondent lending business (4/29/22)
Primis Bank to acquire SeaTrust Mortgage Company (4/28/22)
Owning to cut 189 jobs in Orange, CA
Union Home Mortgage layoffs in Strongsville, OH
Flagstar Bank cut 20% of mortgage staff (420 jobs)
Rocket Mortgage offering buyouts to 8% of staff
Blend Labs to lay off 200 employees
USAA Bank cut 90+ mortgage jobs
National Bank Holdings Corporation to acquire Bank of Jackson Hole
Movement Mortgage layoffs (based on industry reporting)
PennyMac to cut 227 jobs in Agoura/Moorpark/Westlake, CA
Prospect Home Finance to cut 5 jobs in La Jolla, CA
PennyMac to cut 81 jobs in Roseville, CA
All Cal Financial to merge with InstaMortgage
Knock to reduce its workforce by approximately 46%
Better Mortgage to cut additional 3,000 jobs in United States and India
TD Bank to acquire First Horizon Corp.
Ellington Financial to acquire reverse mortgage lender Longbridge Financial
WinnPointe Corporation dba Interactive Mortgage to cut 51 jobs in Orange, CA
Santander Bank halts all mortgage lending including HELOCs, layoffs (2/2/22)
KKR to acquire Merchants Mortgage Trust & Corporation, LLC
Mortgage Solutions Financial to acquire First American State Bank, will change name to MSF Bank
Redfin to acquire Bay Equity Home Loans, 121 layoffs (1/11/22)
Stearns Wholesale to shut down, 348 layoffs (1/6/22)
Zillow cut 32 jobs in Coppell, TX (1/3/22)
Genpact Mortgage Services Inc. cut 14 jobs in Irvine, CA
Texas Partners Bank to acquire Legacy Mutual Mortgage
Eustis Mortgage Corporation to acquire Signature Mortgage Corporation
Better Mortgage to cut roughly 900 jobs (9% of staff)
Interfirst Mortgage to cut 77 jobs in Charlotte, NC
Opendoor to acquire RedDoor
Zillow Offers shut down, 25% of staff to be let go
First Federal Community Bank to acquire Lighthouse Mortgage
Armed Forces Bank to acquire residential mortgage operations of KS StateBank
Athene to acquire non-QM lender Newfi
New Residential Investment Corp. to acquire Genesis Capital LLC
U.S. Bank to acquire MUFG Union Bank
Arcus Lending changes name to InstaMortgage
Figure to merge with Homebridge Financial Services
Better Mortgage to acquire U.K. based broker Trussle
https://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/
I first created this list of mortgage layoffs and closures in February 2007, back when scores of mortgage companies were consolidating, laying off employees, sending out scary warnings, and going out of business.
Around that time, some 2.33% of all U.S. mortgages were delinquent, a number which was sure to rise over the following years as the full extent of the mortgage crisis revealed itself.
Between the first and second quarter of 2006 alone, mortgage repurchase requests tripled thanks to shoddy underwriting that was prevalent during that era.
Adding to lender woes were declining home values in almost every metropolitan area throughout the United States, sky-high home prices at time of origination, rising mortgage rates, rampant fraud, a deteriorating secondary market, and unmanageable mortgage payments.
There were some 86,126 mortgage job cuts in 2007, and countless more in subsequent years as major institutions like Bear Stearns, Countrywide Financial, IndyMac, and Washington Mutual all shuttered.
Even though it has been roughly a decade since the downturn began, mortgage companies are still facing the consequences of getting involved in what was then a very risky housing market.
Amazingly, we continue to see layoffs and closures driven by what transpired many years ago. Given how bad things got, this isn’t too surprising.
Recently, mortgage layoffs have been driven by a major decrease in refinance demand and a dwindling pool of eligible home buyers thanks to significantly higher mortgage rates.
I’ve seen a surge of user comments from former mortgage employees who have been laid off. Those can be seen below the list at the bottom of the page.
Simply put, mortgage companies must “rightsize” as too many players chase far too few loans.
List last updated on July 6th, 2022
Latest updates:
Wells Fargo to cut 107 jobs in Des Moines area (7/6/22)
Redwood Trust acquires Riverbend Lending (7/5/22)
AnnieMac Home Mortgage acquires OVM Financial (6/30/22)
First Guaranty Mortgage Corp. files Chapter 11 bankruptcy (6/30/22)
Mid America Mortgage, Inc. to rebrand as Click n’ Close (6/25/22)
First Guaranty Mortgage Corp. cut 428 jobs in Plano, TX (6/24/22)
Barclays to acquire Kensington Mortgages (6/24/22)
Chase to cut 1,000 home lending jobs (6/22/22)
HomeLight acquires Accept.inc (6/16/22)
Notarize let go of 25% of staff (6/15/22)
Compass to cut 10% of its workforce (6/14/22)
Redfin to slash nearly 500 jobs (6/14/22)
Priority Mortgage to merge with Doorway Home Loans (6/10/22)
Wyndham Capital Mortgage to cut 48 jobs in Charlotte, NC (6/9/22)
Real Genius (FirstBank) laying off 74 employees in Charlotte, NC (6/2/22)
Tomo cuts 44 jobs (6/1/22)
Real Genius (FirstBank) laying off 35 employees in Nasville, TN (5/31/22)
Panorama Mortgage Group acquires Rely Home Loans (5/31/22)
Wells Fargo cut roughly 90 mortgage jobs in Des Moines area (5/24/22)
Nationstar Mortgage (Mr. Cooper) cutting 120 jobs in Santa, Ana CA (5/20/22)
Mid America Mortgage to sell its retail channel to Legend Lending (5/16/22)
Panorama Mortgage Group acquires Vision Mortgage Group (5/13/22)
Intercontinental Exchange (ICE) to acquire Black Knight, Inc. (5/4/22)
Costco Mortgage program no longer available as of May 1st, 2022 (5/1/22)
Pennymac to cut 45 jobs in Pasadena, CA
Mr. Cooper cut roughly 250 jobs during Q1 2022
Planet Home Lending to acquire Homepoint’s correspondent lending business (4/29/22)
Primis Bank to acquire SeaTrust Mortgage Company (4/28/22)
Owning to cut 189 jobs in Orange, CA
Union Home Mortgage layoffs in Strongsville, OH
Flagstar Bank cut 20% of mortgage staff (420 jobs)
Rocket Mortgage offering buyouts to 8% of staff
Blend Labs to lay off 200 employees
USAA Bank cut 90+ mortgage jobs
National Bank Holdings Corporation to acquire Bank of Jackson Hole
Movement Mortgage layoffs (based on industry reporting)
PennyMac to cut 227 jobs in Agoura/Moorpark/Westlake, CA
Prospect Home Finance to cut 5 jobs in La Jolla, CA
PennyMac to cut 81 jobs in Roseville, CA
All Cal Financial to merge with InstaMortgage
Knock to reduce its workforce by approximately 46%
Better Mortgage to cut additional 3,000 jobs in United States and India
TD Bank to acquire First Horizon Corp.
Ellington Financial to acquire reverse mortgage lender Longbridge Financial
WinnPointe Corporation dba Interactive Mortgage to cut 51 jobs in Orange, CA
Santander Bank halts all mortgage lending including HELOCs, layoffs (2/2/22)
KKR to acquire Merchants Mortgage Trust & Corporation, LLC
Mortgage Solutions Financial to acquire First American State Bank, will change name to MSF Bank
Redfin to acquire Bay Equity Home Loans, 121 layoffs (1/11/22)
Stearns Wholesale to shut down, 348 layoffs (1/6/22)
Zillow cut 32 jobs in Coppell, TX (1/3/22)
Genpact Mortgage Services Inc. cut 14 jobs in Irvine, CA
Texas Partners Bank to acquire Legacy Mutual Mortgage
Eustis Mortgage Corporation to acquire Signature Mortgage Corporation
Better Mortgage to cut roughly 900 jobs (9% of staff)
Interfirst Mortgage to cut 77 jobs in Charlotte, NC
Opendoor to acquire RedDoor
Zillow Offers shut down, 25% of staff to be let go
First Federal Community Bank to acquire Lighthouse Mortgage
Armed Forces Bank to acquire residential mortgage operations of KS StateBank
Athene to acquire non-QM lender Newfi
New Residential Investment Corp. to acquire Genesis Capital LLC
U.S. Bank to acquire MUFG Union Bank
Arcus Lending changes name to InstaMortgage
Figure to merge with Homebridge Financial Services
Better Mortgage to acquire U.K. based broker Trussle
https://www.thetruthaboutmortgage.com/a-list-of-recent-mortgage-closures-mergers-and-layoffs/
6
stfu
2022 Jul 15, 11:53am
On the plus side, they are creating a monster refi market for next year when the FED starts easing again. Keep those LO skills sharp you darling transaction whores.
7
exfatguy
2022 Jul 15, 1:35pm
What kind of schmuck needs a mortgage? The world is all cash now (except for me, a schmuck).
8
GNL
2022 Jul 15, 1:56pm
GNL
2022 Jul 15, 1:56pm
stfu says
Really? A monster refi market will be created in 1 year? An agent just told me today the market is crashing. How can a refi market be built when loan officers are being let go in droves?
On the plus side, they are creating a monster refi market for next year when the FED starts easing again. Keep those LO skills sharp you darling transaction whores.
Really? A monster refi market will be created in 1 year? An agent just told me today the market is crashing. How can a refi market be built when loan officers are being let go in droves?
KEY FACTS
In a regulatory filing released Tuesday, California-based loanDepot said it has cut about 2,800 jobs this year and expects to cut about 2,000 more by year’s end, as part of a plan to "aggressively" cut costs by about $400 million on an annualized basis; the company currently employs about 8,500 people.
“After two years of record-breaking volumes, the market has contracted sharply and abruptly in 2022,” CEO Frank Martell said in a statement about the plan, which also includes reduced marketing and property sales to return to previous levels of staffing and expenses.
Chief Financial Officer Patrick Flanagan said the firm anticipates “challenging market conditions” to continue through next year, with mortgage originations projected to decline by about half in 2021, as compared to last year, and an "accelerated" decline in the coming months.
Shares of loanDepot, the nation's third-largest mortgage origination firm, slipped nearly 1% in early trading Tuesday and have collapsed nearly 88% this year, compared to a 20% decline for the S&P 500.
The company’s struggles come as housing demand begins to take a hit from the Federal Reserve’s interest rate hikes, which are designed to cool decades-high inflation but also push up the price of debt; the rate for a 30-year fixed mortgage has climbed to 5.77% from 3.29% at the start of the year, adding hundreds of dollars to the cost of new mortgages each month.
LoanDepot is far from alone in laying off employees: Wells Fargo and JPMorgan have announced rounds of layoffs, cutting thousands of jobs in their home-lending departments, and last month, real estate firms Compass and Redfin cut about 450 jobs each.
CRUCIAL QUOTE
“Rates are significantly higher than they were a year ago, which is why applications for home purchases and refinances remain depressed,” says Joel Kan of the Mortgage Bankers Association. “Purchase activity is hamstrung by ongoing affordability challenges and low inventory, and homeowners still have reduced incentive to apply for a refinance.”
KEY BACKGROUND
Home buying demand skyrocketed during the pandemic as interest rates collapsed and an influx of Americans started working from home. However, the Fed's rate hikes have quickly spurred a reversal. Mortgage originations jumped from $2.3 trillion in 2019 to more than $4 trillion in 2020 and 2021, but demand has since plummeted to the lowest level in more than two decades.
https://www.forbes.com/sites/jonathanponciano/2022/07/12/mortgage-giant-cuts-thousands-of-jobs-warns-of-accelerated-downturn-as-housing-market-abruptly-collapses/?sh=21ea363fea43