Mr. Cooper lays off 420 while mortgage industry cuts mount

The pace of layoffs across the mortgage landscape isn’t letting up, with more firms announcing major cuts in response to rising interest rates and declining volumes.

Mr. Cooper is laying off approximately 420 staff members, or 5% of its total employee base, mostly in originations, it announced Thursday. The terminations include 16% of the company’s California workforce, with 120 cuts at its Santa Ana, California office. Mr. Cooper already laid off approximately 250 employees during the first quarter.

“It is with deep regret that we needed to eliminate positions as part of our efforts to manage costs and ensure we position the company for long-term success,” the Dallas-based firm said in a statement.

The Santa Ana office announcement was disclosed in a California Worker Adjustment and Retraining Notification filed last month and will take effect in mid July.

Nashville-based FirstBank is discontinuing its direct-to-consumer channel, Real Genius, and will close a 74-member Charlotte, North Carolina, office in mid July, it confirmed Thursday. The exact number of terminated workers was undisclosed, and a representative said impacted staff are being offered severance packages, outplacement services and prospective transfers to other divisions.

“Our direct-to-consumer channel is particularly dependent on the support of a strong refinance market, and the current lack of demand and interest rate environment is unfavorable for future profitability in this delivery channel,” the company said in an Securities and Exchange Commission filing last month. 

The Charlotte office closure was disclosed in a North Carolina WARN notice and first reported by the Charlotte Business Journal.

FirstBank, a subsidiary of FB Financial, acquired Real Genius in 2013, when it was then known as ConsumerDirect Mortgage before rebranding in February. The channel was responsible for 43.4% of FirstBank’s total interest-rate lock volume in the first quarter of 2022, down from 50.2% over the same time last year, according to the SEC filing. 

Real Genius also generated 50.7% of FirstBank’s sales volume over the first three months of this year, down from 52.8% over Q1 2021. The bank reported its total interest-rate lock volume decreased $579.9 million, or 30.7%, in Q1 2022 compared to Q1 2021.

The restructuring will cost FirstBank approximately $11 million to $13 million, and the consumer-direct channel will close prior to the fourth quarter this year. FirstBank, with branches across the Southeast, said it will continue to originate loans through its retail channel, retain mortgage servicing rights and continue holding 1-4 family mortgage loans in its portfolio.

PennyMac in WARN notices last month also disclosed 31 more layoffs across three Southern California locations, effective in mid-July. The lender has already cut hundreds of positions since the beginning of the year, including 190 California-based workers, who will be terminated in late June and early July.

A representative for PennyMac didn’t respond to a request for comment Thursday. The disclosures come amid layoff and voluntary buyout announcements from lenders like fintech startup Tomo Networks and Better.com, to market leaders Rocket Cos. and Wells Fargo.