Mortgage subservicer LoanCare conducted a round of layoffs on June 17, as the need to assist borrowers affected by the pandemic continues to decline.
LoanCare routinely manages its resources in conjunction with its work requirements, Dave Worrall, its president, said in a statement. Because of COVID-19, Congress mandated servicers to grant forbearances to mortgage borrowers and the company had staffed up to handle that.
“We added capacity to cover needs during the pandemic and associated relief programs,” Worrall said. “The work that relates to these programs has begun to conclude, so we have adjusted our staff.”
Loans in forbearance represent 0.85% of servicers’ portfolio volume as of May 31, down from 0.94% one month prior, according to the latest data from the Mortgage Bankers Association. Approximately 425,000 people are currently in forbearance plans.
“Servicers are whittling away at the remaining loans in forbearance, even as the pace of monthly forbearance exits slowed in May to a new survey low,” Marina Walsh, the MBA’s vice president of industry analysis, said in a press release.
LoanCare did not disclose how many positions it eliminated, though it is listed as having 982 employees on LinkedIn. The headcount grew 19% in the past two years, but it had no additions in the last six months.
The affected employees are receiving outplacement services, Worrall said.
Virginia Beach, Virginia-based LoanCare is one of the largest subservicers in the mortgage industry. Its ultimate parent company is Fidelity National Financial, which is the nation’s largest title insurance underwriter on a holding company basis.
The company has three other offices: Jacksonville, Florida; Coraopolis, Pennsylvania; and Chandler, Arizona. A check of the Worker Adjustment and Retraining Notification sites in all four states showed no filings from LoanCare.
“As the market continues to evolve and opportunities present themselves, our door is always open to adding new team members,” Worrall added.
These layoffs show that no sector of the mortgage business is immune to staff reductions.
While the initial cuts, including Better.com’s infamous firing by Zoom, pretty much concentrated on the mortgage sales and related staffs, some of the more recent terminations cover other areas.
Notarize, for example, fired approximately 25% of its payroll as it shifted emphasis to building revenue from existing customers instead of concentrating on new ones.
Real estate brokerages Compass and Redfin also decided to reduce headcount by 10% and 6% respectively, even though mortgage economists are still forecasting the purchase loan segment to remain strong throughout 2022.
Reverse mortgage lender American Advisors Group also let go of an undisclosed number of employees. The reverse mortgage product, while still just a small portion of total mortgage originations, is designed to serve seniors who are home equity rich but cash poor, which should help drive business in the current economic turmoil.
Other recent layoffs from Wyndham Capital, FirstBank and Open Mortgage involved forward mortgage sales staff.