NEW YORK: Mortgage firms including Angel Oak and Lower.com have laid off employees after a jump in lending rates to 15-year highs dramatically slowed borrowing.
Atlanta-based Angel Oak Home Loans, a retail lender, last week cut 57 employees, amounting to 15% of staff, according to a spokesperson.
An affiliated wholesale lender, Angel Oak Mortgage Solutions, laid off 75 people, or 20% of its employees, in the third week of September.
Ohio-based Lower.com reduced its headcount by about 6%, and is focusing more on loans for home purchases, as opposed to refinancing, the firm said in a statement.
And Keller Mortgage earlier this month also cut workers, with at least two reporting layoffs in a LinkedIn post.
A spokesperson for Keller Williams, an affiliate, said it restructured its mortgage operations group “in light of macroeconomic market conditions.”
The firm remains committed to assisting its impacted employees and to growing mortgage offerings over the long term, the spokesperson added.
The job cuts are coming as higher mortgage rates cut into demand from homeowners to refinance their loans, and reduced purchase activity as well.
Applications for home loans have plunged more than 60% this year, according to an index from the Mortgage Bankers Association.
The average interest rate on a 30-year mortgage has soared to 6.7%, close to the highest level since 2007, according to Freddie Mac.
For many mortgage finance companies, that slowdown in application volume means there’s a lot less for employees to do.
While revenue is dropping, costs are also jumping, as higher interest rates boost funding costs for many firms, including those that repackage home loans into bonds and sell them to investors. — Bloomberg
