Rumor has it those fired are primarily the folks that entered the mortgage industry shortly after March 2020, almost entirely loan originators, specifically of the salaried type.
https://www.youtube.com/watch?v=X7GVklRqHRY
It was pretty clear to me from occasionally competing with them at various points over 2020 and into 2021 that they were either in the red on each loan they did, or damned close to it. From the various threads on here it was also clear there was a bit of a competence gap for any borrower-set the least bit non-vanilla (self employed, etc), or for some of those brave souls that tried to use them on a purchase mortgage (the pattern was that it would go REALY well, and if you took that risk and that’s you then power to you, or it would go REALY bad [on the “omg I lost the house” or “omg i almost lost the house” spectrum] one of those two extremes). A couple months ago word got out that their officially posted numbers reflected a loss as well. They’ve always been known to be refi-heavy, which internal to the industry is known to be an unsustainable practice even if you aren’t running in the red — refi demand is highly elastic (feast or famine), purchase mortgage demand is inelastic (econ 101 reminder from wikipedia) since you having that additional child and outgrowing your house/apartment is independent of mortgage rates. For those who got one of those refis wherein they took a loss to get you that rate and those fees, who had a smooth experience, hey, power to you. Clicking around on their website today, it looks like they’re trying to charge $6k in closing costs on a $400k refi loan, which is somewhat above the current overall market average of 0.7% * $400k = $2800.
This article is behind a paywall, but implies that the layoffs were related to a $750m cash injection by an outside investor announced a day earlier. It also says that the previous plans to go public in the near future are on hold, with no new ETA. These aren’t the only layoffs, anyone refi heavy with a base salary is potentially on the chopping block, more are expected.
If you own a small/medium business that’s been struggling to find entry level type workers of late, find out if there’s a mortgage shop/office/etc in your area that grew a lot starting in March 2020. Maybe the announcement already came, maybe it’s coming next week, I don’t know, but there’s about to be some out of work folks there for you to look at hiring, that all have telephone customer service experience.
In the short/medium term, I don’t expect refis drying up to significantly alleviate the appraisal woes that everyone has been feeling of late. The appraisal woes were always primarily driven by probate and divorce courts reopening, after being closed for a year. When those backlogs (2020 baseline deaths/divorces + the COVID deaths/divorces, none of which could be processed in 2020 with the courts shut down) are worked through will be regional. I actually have no idea where to look to get a sense of that, maybe I should call a real estate or probate lawyer?
Between this set of mortgage layoffs and zillow firing 25% of it’s staff, it looks like this has broadly been an attempt by tech-centric folks to “operate at a loss to grow marketshare” that’s kind of unwinding. It may be the case that you can do that when it’s an uber ride or hardcover book, where it’s a $20 transaction that you lose 10% on, but perhaps not when each unit/customer is a $500k transaction that you lose 10% on. IDK. We’ll see. But it looks a tad like this broad attempt to “grow marketshare by losing $” is winding down. For now, at least.
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