Mr. Cooper has falled in line with a dismal trend set off by rising mortgage rates.
The Dallas-based loan servicing giant, laid off 420 employees, Inman reported. The layoffs, which mostly impacted the loan origination department of the company, follows a round of layoffs earlier this year that effected 250 employees.
Industry publication Asset Securitization Report was first to report on the latest round of layoffs, which affected about 5 percent of the company’s workforce.
In a statement to Inman, Mr. Cooper pointed to “rapidly increasing interest rates and rising inflation, which has resulted in decreased originations volumes.” In a regulatory filing last month, the company lowered the projection for the generation of mortgage originations in the second quarter from $65 million to $85 million down to $40 million to $50 million.
Mr. Cooper’s direct lending business has taken a sharp turn down, declining by 32 percent year over year.
The company also has a big focus in loan servicing. That part of the business is humming along because fewer buyers want to refinance loans in a rising rate environment. These colliding tailwinds had the company predicting it would only break even during the second quarter.
If there’s any solace the recently unemployed workers can take, it’s that they’re hardly alone. Layoffs have swept the tech and mortgage industries as companies have struggled to cope with the changing mortgage rate environment.
A total of 44 employees were let go from digital mortgage lender Tomo, nearly one-third of its workforce. The layoffs came fewer than three months after an equity capital injection.
In April, digital lender Blend Labs laid off 200 employees, or roughly 10 percent of its staff. The lending arm of Keller Williams, Keller Mortgage, recently implemented its second round of layoffs in only a few months. And Better.com has laid off thousands since interest rates began rising in the fall, some in more controversial fashion than others.
Mr. Cooper was previously known as Nationstar Mortgage before a 2017 rebrand. In 2020, the company was ordered to pay $73 million to about 40,000 homeowners in a settlement with the Consumer Financial Protection Bureau. The company was accused of failing to provide basic services for the mortgages it serviced from 2012 to 2016.
[Inman] — Holden Walter-Warner