Mortgage tech firm lays off 200 as rates surge, industry slumps

Blend Labs sheds 10% of staff — and it’s not alone

National Weekend Edition /
Apr.April 23, 2022 09:00 AM
Nima Ghamsari, co-founder, Blend Labs (Blend Labs, iStock)

Nima Ghamsari, co-founder, Blend Labs (Blend Labs, iStock/Photo Illustration by Steven Dilakian for The Real Deal)

A digital lending platform is laying off 200 employees as a historic surge in mortgage rates tamps down applications.

Blend Labs is letting go of roughly 10 percent of its staff to shed $34.5 million in annual payroll, according to a regulatory filing reported by Inman. Company leadership previously forecast cost-cutting measures as interest rates climbed and the industry braced for a dive in mortgage applications.

Co-founder and CEO Nima Ghamsari said the laid-off Blend Labs employees are eligible for at least 18 weeks of pay and continued health insurance among other benefits, which will reportedly cost the company around $6.7 million in severance and stock-based compensation.

Rising rates means less refinancing and fewer employees needed to process applications. Fannie Mae analysts said this week that they expect lenders to refinance $889 billion in mortgages this year but only $558 billion next year, an 80 percent drop from the $2.8 trillion in 2020.

Home sales are also slipping because of a drop in listings, resulting in fewer mortgages. A rise in the percentage of cash buyers has also been a headwind for the mortgage industry.

Layoffs have swept the industry in recent months, most visibly at Better.com, where waves of badly handled cuts generated unwanted publicity for the firm.

The online mortgage startup laid off 3,000 workers, or more than one third of its headcount, in March. Some of the New York-based company’s affected employees found out about the layoffs when severance payments were released prior to an official announcement.

Movement Mortgage in April laid off around 170 employees, primarily affecting employees in the processing, underwriting and closing departments in the South Carolina-based company. Interactive Mortgage and Freedom Mortgage had previously reduced headcount.




    [Inman] — Ellen Cranley


    Related Articles

    arrow_forward_ios
    From left: Amy Schumer and 190 Riverside Drive; Jimmy Fallon and 34 Gramercy Park East (Getty Images, Beyond My Ken, CC BY-SA 4.0 - via Wikimedia Commons, iStock)
    Jimmy Fallon, Amy Schumer selling Manhattan pads
    Jimmy Fallon, Amy Schumer selling Manhattan pads
    OKO's Vladislav Doronin and the Crown Building ( OKO Group, Aman)
    Crown Building notches another peak sale with $55M condo
    Crown Building notches another peak sale with $55M condo
    R-L: Willow's Kevin Danehy, Era Ventures' Clelia Warburg Peters, Fifth Wall's Brad Greiwe and The Real Deal's Hiten Samtani (Photo by Paul Dilakian)
    Real estate tech is coming for your business
    Real estate tech is coming for your business
    A photo illustration of a crystal ball predicting future home prices (iStock)
    Home sales, building to slow: Fannie Mae
    Home sales, building to slow: Fannie Mae
    New York skyline
    Rising interest rates will dampen city’s investment sales market this year
    Rising interest rates will dampen city’s investment sales market this year
    L-R: Douglas Elliman CEO Scott Durkin, Serhant CEO Ryan Serhant, Brown Harris Stevens CEO Bess Freedman, The Real Deal's Hiten Samtani (Photos by Paul Dilakian)
    Top resi execs talk brand building, tech and politics at TRD NYC event
    Top resi execs talk brand building, tech and politics at TRD NYC event
    Southampton Village mayor Jesse Warren (Getty Images, iStock, Illustration by Kevin Cifuentes for The Real Deal)
    Southampton Village allows owners to collect summer’s rent upfront
    Southampton Village allows owners to collect summer’s rent upfront
    Zillow economist Nicole Bichaud (Zillow, iStock)
    Where have home values grown more, suburbs or cities? The answer may surprise you
    Where have home values grown more, suburbs or cities? The answer may surprise you
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...