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Editor’s Note: This story was updated on Friday, June 3, 2022
The sharp rise in mortgage rates this year has brought uncertainty to many real estate companies. Some real estate companies have already dismissed workers as economists revise their home sales forecasts this year and next.
With a few exceptions such as Homie, REX Real Estate, and Side, layoffs are primarily limited to companies that provide mortgages and mortgage-related services (titles, closings, technologies, etc.).
The Measurement of the end of stimulus Fannie Mae’s economists predict the formation of mortgages as the refinancing boom for profitable mortgages has plummeted as a result of raising interest rates to historically low levels during the pandemic. 40 percent down this year.
However, while some companies are offering mortgages, title insurance and closing services “on the right scale” to new expectations, the employment market remains strong. At 3.6% in April unemployment Below historical trends, government reports 11.4 million jobsMany employers are still struggling to fill the opening.
Here’s a summary of some of the companies that have fired workers, reduced employment, or offered buyouts to employees to reduce their size in the last few months.
Vishal Garg, founder and CEO of Better Holdco Inc., an end-to-end provider of mortgage, real estate brokerage, title and closing services, released international news in December. Dismissed 900 employees Through a zoom call.later Departure of senior management Including Christian Wallace, Head of Betters Real estate brokerage subsidiaryBetter Real Estate LLC, Better Shed an additional 3,000 workers March.
Mortgage Technology Provider and Title Insurance Company Blend Labs Inc. Announced in April Refinancing has been reduced due to rising mortgage rates, resulting in the dismissal of 200 employees, or about 10 percent of the workforce. Blend before it was released last year Paid $ 422 million Acquires Title 365, a national title insurance and payment service provider, from Cooper Group. With this transaction, Blend increased revenue in 2021 by 144%, but was also able to increase operating expenses by 129%.
Digital Title Insurance, Escrow and Closing Provider Doma Announced in May After rising mortgage rates and chilling customers’ mortgage formations, 310 employees (about 15% of employees) were to be dismissed. CEO Max Simkoff said Doma will underwrite more complex purchase loan title insurance by reducing costs so that it can continue to adopt the technology it has pioneered to provide “immediate underwriting” of title insurance for refinancing mortgages. Said it can be used for.
Known to many realtors for a joint venture between franchise giant Realogy Holdings Corp. and state-owned securities firm @properties and Compass, Guaranteed Rate made a big move in early 2021 and acquired Stearns Holdings LLC. The number one lender. In January, Guaranteed Rate reduced its ambitions, Dismiss 348 employees Closes Stearns Wholesale Lending, a third-party wholesale channel.
Utah-based brokerage firm Homie Dismissed 119 employees In February, about one-third of the workforce said limited home inventories “created a difficult real estate market for homebuyers.”
Real estate franchise giant Keller Williams fired 150 recent new employees From the lending department Keller Mortgage in October More pink slip At the end of May as part of the company’s operations and reorganization of the support group.Even if it fired workers, Keller Mortgage said it was committed to long-term growth, and Advertising openings Allow loan officers to work remotely from anywhere in the United States
Power Buyer Knock announced a year after adopting Goldman Sachs and launching the company at a valuation of $ 2 billion. Layoff affecting 115 employees March, or about 46 percent of its workforce. By moving away from the IPO’s plans and completing a $ 220 million round of funding with private investors, Knock said downsizing could continue plans to expand to 90 markets by the end of the year. ..
LoanDepot CFO reported a loss of $ 91.3 million in the first quarter. Patrick Flanagan warned In March, “staff reduction” is part of a plan to “proactively” manage costs to restore profitability by the end of the year. “The first-quarter results reflect that the industry could be one of the most difficult environments we have ever experienced,” said LoanDepot founder and executive chairman Anthony Hsieh. Said on the phone with the list.
The rise in mortgage rates has significantly improved profitability by recovering mortgage payments from nearly 4 million borrowers, which has been Cooper’s main business.However, they are also limiting the company’s ability to create new mortgages and to the company Dismiss 250 workers During the first quarter of 2022, and Another 420 workers During the second quarter. At the end of 2021, Mr. Cooper had 8,200 employees, so the previously announced 670 dismissals mean the company has shrunk by at least 8% since then.
Penny Mac, the country’s second largest mortgage lender, has been fired 236 workers From six locations in California in May due to declining demand for mortgages. Penny Mac hired 7,208 workers worldwide at the end of last year.
It also meant a bid by real estate agent Redfin to expand its presence in mortgages by acquiring San Francisco-based Bay Equity Mortgage for $ 135 million. Pink voucher for 121 existing workers In sales support, capital markets and operations of Redfin’s existing mortgage business.
REX real estate
After two layoffs last year, discount broker REX Real Estate closed two offices in Texas in May.nevertheless Proposed report REX Real Estate disbanded all agents and was preparing to shut down, REX co-founder and COO Lynley Sides Talked to real trends The company’s focus is on mediating transactions for institutional investors in California and Florida.
Rocket Companies Co., Ltd.
To avoid layoffs, Rocket Companies Inc., the country’s largest mortgage lender, offered a takeover offer to about 2,000 workers in April.If accepted, the acquisition is expected to save the rocket About $ 180 million annuallyExecutives said in May’s first-quarter earnings announcement.
The real estate technology startup side says it has expanded faster than training, supporting and training recent hires. 10% of employees On June 1st, they were unemployed. Last summer, the side that provided branding and technology to independent brokers and often acted as a record broker for high-performance agent teams. We are making good progress toward the release After gaining unicorn status and raising more than $ 250 million.
Tomo, a mortgage fintech launched by former Zillow executives dedicated to buying loans, Almost one-third CEO Greg Schwartz quoted “Recent changes in the mortgage and venture capital markets due to rising interest rates,” and said Tomo has so far postponed plans to expand into additional markets.
Wells Fargo, whose mortgage production is declining as retail stores close, said in April that an unspecified number of workers in the mortgage sector were “as a result of the cyclical changes in the broader mortgage environment.” Was dismissed. The company told Inman.. Wells Fargo executives said in their first-quarter earnings report that they plan to reduce their mortgage income by 33% from a year ago to $ 1.49 billion.
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