According to the latest job estimates from the Bureau of Labor Statistics, payrolls at no-deposit real estate finance firms rose in June after a slight decline in the previous month.
The number of mortgage bankers and brokers employed by non-banks rose to 389,400 from 385,100 in May, up from 321,400 a year ago.
The slight increase reinforces other estimates that suggest that the more labor-intensive procurement contracts require closure, even though procurement and profits have weakened. Next, additional staff or outsourcing can be added to meet the changing requirements in the service area.
"If we see the failure volumes increase, it will be a question of how quickly servicers can meet the demand for this excess capacity," said Mike Rawls, CEO of Mr. Cooper subsidiary Xome, in an interview.
Some servicers and outsourcers have been cross-trained to try to manage the shift in demand between the expiry of deferrals and the conditional resumption of foreclosures.
The still booming housing market could also lead to some cessation of loan production, with the stock possibly growing marginally due to the resumption of loan processing, but the outlook for this varies widely by region.
The end of the ban and the rate at which troubled borrowers cut businesses to pay off their debts by selling real estate are reportedly driving inventory gains in Florida, which has a relatively quick foreclosure process and relatively few restrictions. However, the pandemic remains a risk to the pace of home sales in all markets as vaccination rates vary and infection rates rise.
"Personally, I've seen a slight decrease in choice for our buyers … but the concern is … these COVID numbers," said Kristen Conti, broker-owner of Peacock Premier Properties in Englewood, Florida. during a virtual panel discussion organized by distressed asset specialist Gryphon USA on Thursday. Conti is a board member of the Industry Networking Group Default Industry Leaders.
Much also depends on consumer demand and incomes strong enough to sustain house prices, which are still sky-high in many places due to inventory shortages, which supports a broader employment recovery in the numbers released on Friday.
The U.S. economy created 943,000 jobs in July, the fastest pace in nearly a year, though the total was only marginally higher than June's revised upward of 938,000, and some of the increase may have been due to the end of increased unemployment benefits in some states. (More digits are released with less delay than estimates by the non-bank mortgage industry.)
A decline in the unemployment rate to 5.4% in July from 5.9% in the previous month was another positive indicator for consumer spending. However, these numbers could actually be slightly higher due to an ongoing BLS misclassification error. Unemployment also remains high compared to the historically low pre-pandemic levels of just under 4%.
“Almost 75% of the jobs lost at the start of the pandemic have been regained. At this monthly pace, we would be returning to the pre-COVID employment summit by February 2022, ”Deputy First American Chief Economist Odeta Kushi said in a statement sent via email.