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A spokesman confirmed that Homepoint laid off another 100 employees in four states in the two months following a series of layoffs that cut nearly 500 jobs.
The reduction was due to the slowdown and volatility in the housing market driven by inflation-driven interest rate increases.
Mortgage Professional America was notified of a recent layoff through the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to provide 60 days’ notice of layoffs.
A notice filed with the Texas Workforce Commission warns of layoffs for about 49 Homepoint employees, representing a mixed workforce of remote and in-person workers in the Dallas area.
Farmers Branch’s budget cuts in the Dallas area are permanent, according to the report.
Homepoint spokesman Brad Pettiford confirmed some layoffs last week and said it sent warning notices to four states, affecting about 100 people. In addition to Texas, Arizona, Florida, and Michigan lost jobs, Pettiford said.
The cuts come two months after the Michigan-based lender cut more than 500 jobs as lenders and mortgage loan managers face deteriorating market conditions.
The layoffs at the nation’s No. 3 wholesaler were disclosed in an 8-K filing in late August, where the company said it aims to save $100 million annually after posting a loss of 44, $4 million in the first quarter.
High-interest rates and increased competition in the wholesale market are putting pressure on margins.
The previous WARN Act warned of 526 layoffs, a previously undisclosed number. At the time, Pettiford told MPA that the company would cut 217 jobs from its two offices in Ann Arbor, Michigan, starting in November.
Homepoint lost $44.4 million in the second quarter of 2022 as higher interest rates and fierce wholesale competition squeezed margins.
Willie Newman, president, and CEO of Home Point Capital said that by 2022, the mortgage industry will enter a difficult part of the mortgage cycle, where higher interest rates will shrink the refinancing market, while the ability industry remains at an all-time high.
They aim to navigate these recessions while allowing for future growth. The lenders are the latest in a growing line of companies to cut jobs or close their doors entirely amid slowing production.
Sprout Mortgage abruptly closed earlier this year. Other aftershocks were felt in the industry after news of First Guaranty Mortgage’s bankruptcy and Wells Fargo’s announcement that it was ending its mortgages altogether.
Then there were layoffs. In October of this year, the Association of Independent Mortgage Examiners (AIME) estimated the number of industry layoffs at about 23,000.
As a result of the economic downturn, there has been a significant increase in the number of brokers switching from the retail to the wholesale channel. AIME calculates tape records by extrapolating data from the National Mortgage Licensing System.
- In 2021, 6,353 retail lenders joined the Independent Mortgage Brokers Association.
- More than 7,000 loan officers switched from personal to business loans in the first nine months of 2022.
- As of September 2022, the wholesale channel has added nearly 18,000 loan officers. That’s “a rate of growth we’ve never seen before in the wholesale channel,” AIME spokeswoman Nicole Roberts previously told MPA.
- The recent move to wholesalers includes five nationally rated credit managers: Brian Decker, Shah Tehrani, Stetson Lowe, Matt Gouge, and Rebecca Richardson.
Mat Ishbia, president and CEO of United Wholesale Mortgage, provided MPA with his own metrics on wholesale channel flows.
In a recent interview, he said that the company’s portal BeAMortgageBroker.com received more web traffic in the last two months than in 2021.
Reference Source: MPA
