Layoffs hitting mortgage industry – including 48 more workers in Charlotte – here’s why

CHARLOTTE – More layoffs are coming in the mortgage industry, as Wyndham Capital Mortgage expects to reduce staff for a Charlotte office, according to a required notice filed with the North Carolina Department of Commerce.

48 workers will be laid off on or by August 1, a report published by the North Carolina Department of Commerce notes.

Last month, Real Genius announced it would lay off 74 workers and close a Charlotte area office.

The notice submitted to the North Carolina Department of Commerce by Wyndham Capital Mortgage notes that the company “expects to effectuate a reduction-in-force of its operations.”

The company’s Charlotte office is located along Colony Road, and will be the site from which workers are laid off. “That reduction-in-force may result in a mass layoff,” the statement reads.

But the company noted that 38 of those impacted are working remotely or in hybrid roles including working from locations in both North Carolina and South Carolina, while 10 of those who will be laid off are fully remote employees living outside of the Carolinas.

More layoffs in the mortgage industry could be coming, too, a North Carolina-based licensed mortgage broker told WRAL TechWire this week, on the condition of anonymity.

That’s because there are significantly fewer mortgage loans originated now, compared to last year, last quarter, and also last week, the broker said.

“This is the slowest I have been since 2008,” the broker said. “Our business is cyclical, booms and busts.”

That means that some companies may believe they’re now overstaffed, the broker noted. “Too much staff and have to reduce overhead,” the broker told WRAL TechWire.

Layoffs in Charlotte: Real Genius, division of lender FirstBank, to close, lay off 74

What’s happening?

Mortgage rates have risen in recent months, as the Federal Reserve has increased interest rates in an effort to combat inflation and buffer the U.S. economy against a risk of recession.

And a new report from ATTOM Data Solutions showed that mortgage financing activity has also slowed as fewer people seek to refinance an existing mortgage and fewer home sale purchases requiring a mortgage dropped.

Some would-be homebuyers are also turning to adjustable rate mortgages as an option to purchase a home with more affordable monthly payments of principal and interest.

Nationally, residential lending activity is down 32 percent year-over-year, as of the end of the first quarter. But it’s not just that lending activity plummeted in the first quarter, as there are also signs that lending activity has slowed during the second quarter as well. The Mortgage Bankers Association released weekly data yesterday, noting that interest in mortgage financing decreased in the prior week.

“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years,” said Joel Kan, the association’s associate vice president of economic and industry forecasting, in a statement.

Thinking about buying a house? Do it now as costs keep soaring, economist says

Decreases in mortgages means decrease in workforce

Overall, the number of new loans decreased in the first quarter for the fourth consecutive quarter, the ATTOM data show.

In the Charlotte area, lending activity has decreased by 26% year-over-year, according to the ATTOM data set, which WRAL TechWire obtained by request.

In Raleigh’s metropolitan statistical area (MSA), lending activity has decreased 30.4% year-over-year, and in the Durham-Chapel Hill MSA, lending has decreased by 25.9% from a year ago. The first quarter of 2021 was the peak quarter for lending in the history of the data set, which dates back to 2000.

Adjustable mortgages soar as solution to soaring home prices, interest rates

And with fewer mortgage loans being originated in North Carolina, there may not be enough work for mortgage brokers.

That could explain the recent layoff decisions, a licensed mortgage broker based in North Carolina told WRAL TechWire this week, on the condition of anonymity.

“After two of the biggest year ever in the mortgage industry, the Federal Reserve started raising interest rates,” said the broker. “Mortgage rates basically doubled in less than six months.”

Mortgage rates increased in the last week, rising to 5.23% on average for a 30-year fixed loan, the most common mortgage type for residential property, according to the latest data from Freddie Mac.

That’s up from 2.27% a year ago, according to the data set, and up from 3.11% at the end of 2021.