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Another round of layoffs hitting the mortgage industry

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Financial Stability, Nonbank Financial
Wednesday, June 15, 2022
After almost two years of profits and growth for the mortgage industry, companies are now facing the realities of the economic correction occurring as interest rates begin to increase back to “neutral” levels.

One of the ways many companies have been using to lower costs is through a reduction of workforce.

For one company, Keller Williams, a first round of layoffs occurred back in October 2021 when the company announced the layoff of 150 recent recruits after scaling up operations for over a year. Now, Keller Williams, has confirmed a second round of layoffs in its mortgage business.

Though specific numbers have not been confirmed, some now-former employees have characterized the layoffs as “big,” “massive,” and “huge” on postings on LinkedIn.

“In light of current market conditions, we have restructured the operations and support groups within our Keller Mortgage business,” a spokesman for Keller Williams confirmed. 

Purchase mortgages make up most of Keller Mortgage’s business, and the company nearly doubled its payroll to 1,000 employees last year, anticipating growth in purchase mortgage lending that may not have materialized.

California-based lender Pennymac also announced a second round of layoffs. Back in March, Pennymac cut more than 230 positions, and have now confirmed another 207 additional positions will be laid off.

At the start of the year, Pennymac announced aims to boost its direct-to-consumer lending business. This included a $3.9 million investment to open a new mortgage origination center to improve its coast-to-coast operations “while supporting the organization’s overall growth initiative,” Pennymac President and Chief Mortgage Banking Officer Doug Jones said.

Better.com, which has repeatedly faced criticisms for its methods of downsizing, also announced another round of layoffs. A large portion of these layoffs included workers in India, where Better.com maintains significant operations.

This round of layoffs comes as Better.com prepares to merge with Aurora Acquisition Group.

Lender and servicer Mr.Cooper also announced a second round of layoffs this year which will see the elimination of 420 jobs. According to its public disclosures, these cuts will amount to 5 percent of its employee base.

“It is with deep regret that we needed to eliminate positions as part of our efforts to manage costs and ensure we position the company for long-term success,” Mr. Cooper said in a statement Thursday.

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