A Michigan-based mortgage lender is cutting more than 500 jobs in North Texas following a slowdown in housing activity and demand.
Homepoint Financial Corp., one of the nation’s largest mortgage lenders, will lay off 526 employees in Farmers Branch beginning November 1, 2022, according to an official filing with the Texas Workforce Commission (TWC).
Under the Worker Adjustment and Retraining Notification Act (WARN), companies must provide notice 60 days before plant closures or mass layoffs, according to the TWC.
Homepoint Financial, like many mortgage companies across the industry, is reckoning with the current slump in housing activity causing the flurry of widespread layoffs.
“We are in the process of taking the painful step of reducing our workforce to ensure Homepoint is best positioned to navigate the current high-rate, low-margin environment,” spokesperson Brad Pettiford said in a press release.
Pettiford continued, “Over the last several months, we have executed multiple strategic actions to minimize the human impact as much as possible, but continually worsening market conditions make this additional step necessary.”
Farmers Branch is not the only city affected by the staff reduction, according to Pettiford, noting that layoffs happened “across the organization.”
The company did not specify the total amount of employees impacted by the organizational layoffs. Still, The Detroit News reported that the mortgage lender would lay off 217 people at two Ann Arbor offices in November.
Homepoint Financial says the workforce reduction is expected to save the company more than $100 million annually. This is positive news for Home Point Capital, the mortgage lender’s parent company, which reported $44 million in second quarter 2022 losses.
Home Point Capital CEO Willie Newman indicated that the company was not opposed to making additional workforce cuts as it deems fit.
“We’re not afraid to get smaller as an organization,” Newman said in the company’s second-quarter earnings conference call.
Mortgage rates have seen consecutive nationwide increases, with the average rate on a 30-year fixed-rate mortgage increasing 0.11 percentage points to 5.66%, according to Freddie Mac’s weekly rate survey.
As a result, applications for home purchase loans were down roughly 19% annually, while refinance applications were down 79%, according to the Mortgage Bankers Association.
Other North Texas mortgage lenders that have made recent changes to their workforce include Plano-based First Guaranty Mortgage Corp., which cut more than 400 jobs this summer, and Coppell-based Mr. Cooper Group Inc., which has laid off almost 700 people since the start of the year.