JPMorgan Chase added hundreds more to the pool of employees cut by mortgage firms as the industry contends with a collapse in demand.
The bank cut hundreds of more jobs in its mortgage department this week, Bloomberg reported. The layoffs come after the bank’s mortgage-origination volume declined 60 percent last year.
The bank’s headcount reduction didn’t name a specific number, but did include managers.
This is at least the second notable cut to JPMorgan’s mortgage arm as rate hikes by the Federal Reserve rate hikes boosted mortgage rates and sapped pandemic-era borrowing power. In June, the biggest bank in the country laid off hundreds from its home-lending business, though the specific numbers of those cuts also weren’t disclosed. More than 1,000 workers were affected, with half shifted to other divisions.
Layoffs have gripped the mortgage industry for the past year, continuing even as rates have shown signs of normalizing.
New York Community Bank last month slashed 10 percent of its workforce amid the slump in residential mortgages. While the bank is a major multifamily lender in New York City, the cuts were driven by the December acquisition of Flagstar, one of the country’s largest mortgage servicers.
One of JPMorgan’s biggest rivals, Wells Fargo, last month signaled an even larger retreat from the mortgage sector. The bank shifted its focus from trying to grab the maximum number of homeowners to working with existing bank and wealth management customers.
Wells Fargo, which is the largest mortgage servicer in the country, also closed its correspondent lending business that buys loans by third-party firms, which the bank said was responsible for 42 percent of its third quarter originations. It was a dramatic reversal for the bank, which was the biggest lender in the country less than a half-decade ago.
Mortgage demand remains significantly below the levels from a year ago, but there’s some optimism that the light at the end of the rate-hike tunnel could lead to an increase in activity.
— Holden Walter-Warner
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