Two lenders in the growing cash offer space are each laying off 10% of their workforces, citing the impending economic uncertainty already roiling mortgage firms and icing the fundraising space.
New York-based iBuyer Orchard cut just under 100 employees across a mix of its mortgage, title and insurance platforms citing a challenging economic climate over the next 18 months, CEO and founder Court Cunningham said in a statement. The company said the layoff had minimal impact on Orchard Home Loans, where it is continuing to hire and invest resources over the coming year.
“The best way for us to safeguard against further turbulence is to get to profitability as soon as possible, so that we control our own destiny,” Cunningham said.
Impacted staff will receive severance and health insurance benefits for the next three months and Orchard will aid them in job search and networking efforts, it said.
Orchard, founded in 2017 as Perch before a rebrand in 2020, reached unicorn status with a $1 billion valuation after a $100 million Series D funding round last September. The firm backs a customer’s home purchase with cash while it sells their old home while charging a fee similar to a broker’s.
The company includes Orchard Home Loans, the Austin, Texas-based mortgage brokerage operating in 10 states, Orchard Title, Orchard Insurance and Concierge, a service for homebuyers to repair homes before sale at no upfront cost. At the time of its Series D fundraising, Orchard had raised $255 million in equity.
Austin-based UpEquity, cash offer financier, cut nine employees involved in processing, closing and training from its 93-person workforce last week, HousingWire reported. The firm’s growth projections were decimated by the shrinking refinance market and uncertainty surrounding fundraising efforts over the next two years, co-founder and CEO Tim Herman told the site.
UpEquity raised $77 million since it was founded in 2019, including a $50 million Series B round, which closed last October. The power buyer offers both all-cash buying and buy-before-you sell programs and earns commission from brokering or selling the mortgage buyers take out on their homes. The company said it has originated $400 million in loans.
Herman said UpEquity anticipates originating $500 million in purchase loans this year, half of its $1 billion projection at the time of its Series B fundraising round last year. The firm gave impacted employees one month of severance and one-and-a-half months of health benefits, an employee who requested anonymity told HousingWire.
A variety of mortgage-related businesses remain mired in layoffs as origination volumes fall with rising interest rates. JPMorgan Chase is cutting and reassigning more than 1,000 mortgage employees, it said this week, while subservicer LoanCare last Friday undertook a round of cuts as the need for capacity dwindles with borrowers exiting forbearance.