Real estate companies laying off in 2022 so far

0

In June, we’ll dive deeper into mortgages and securities – looking at where the market is headed, product developments and game-changing alternative financing options. join us for Mortgage and Alternative Financing Month, aand subscribe to Additional credit from Inman for weekly updates throughout the year.

Editor’s note: This story was updated on Friday, June 3, 2022

The rapid rise in mortgage rates this year has created uncertainty for many property companies, with some already laying off workers as economists revise their forecasts for home sales this year and next.

With a few exceptions — like Homie, REX Real Estate and Side — the layoffs were largely limited to companies providing mortgages and mortgage-related services, such as title, closing and technology.

Stimulus-ending measures that have taken interest rates to historic lows during the pandemic have brought a boom in profitable mortgage refinancing to an abrupt end, with economists at Fannie Mae predicting mortgage lending will fall 40% this year .

But even though some companies that offer mortgages, title insurance and closing services are “right-sized” to meet new expectations, the job market remains strong. At 3.6% in April, unemployment is below historical trends, and with the government reporting 11.4 million job vacancies, many employers are still struggling to fill vacancies.

Here’s a roundup of some of the companies that have laid off workers, reduced hiring or offered employee buyouts to reduce their workforce in recent months.

Better

An end-to-end provider of mortgage financing, real estate brokerage, and title and closing services, Better Holdco Inc. founder and CEO Vishal Garg made international news in December when he laid off 900 employees on a Zoom call. After the departure of senior executives, including Christian Wallace, the head of Better’s real estate brokerage subsidiary, Better Real Estate LLC, Better laid off another 3,000 workers in March.

Mixed

Mortgage technology provider and title insurer Blend Labs Inc. announced in April that it would lay off 200 employees, or about 10% of its workforce, as rising mortgage rates reduced refinancing. Before going public last year, Blend paid $422 million to acquire national title insurance and settlement services provider, Title365, from Mr. Cooper Group. The deal helped Blend increase revenue by 144% in 2021, but it also contributed to a 129% increase in operating expenses.

doma

Digital title insurance, escrow and closeout provider Doma announced in May that it would lay off 310 employees — about 15% of its workforce — after rising mortgage rates chilled its customers’ mortgages. CEO Max Simkoff said Doma is cutting costs so it can continue to adapt the technology it pioneered to provide “instant underwriting” of title insurance for mortgage refinances, so it can be used to underwrite a title insurance on more complex purchase loans.

Guaranteed rate

Guaranteed rate – known to many real estate agents for its joint ventures with franchise giant Realogy Holdings Corp. and national brokerage firms @properties and Compass – took a big step forward in early 2021, acquiring Stearns Holdings LLC “with the ultimate goal of becoming the national leader. number one lender. In January, Guaranteed Rate scaled back its ambitions, laying off 348 employees and closing its third-party wholesale channel, Stearns Wholesale Lending.

Pal

Utah-based flat-rate brokerage firm Homie laid off 119 employees in February, about a third of its workforce, saying limited housing inventory had ‘created a tough real estate market for homebuyers’ .

Keller Mortgage

Real estate franchise giant Keller Williams laid off 150 recent hires from its lending arm, Keller Mortgage, in October and handed out more pink slips in late May as part of a restructuring of the company’s operations and support groups. ‘company. Even as it is laying off employees, Keller Mortgage said it is committed to long-term growth and announcing openings for loan officers to work remotely from anywhere in the United States.

Struck

A year after hiring Goldman Sachs to take the company public at a proposed valuation of $2 billion, Power Buyer Knock announced layoffs affecting 115 employees in March, or about 46% of its workforce. After stepping away from IPO plans and closing a small $220 million funding round with private investors, Knock said the downsizing will allow it to continue its plans to expand into 90 global markets. end of the year.

LoanDeposit

Reporting a $91.3 million loss in the first quarter, LoanDepot chief financial officer Patrick Flanagan warned in March that ‘staff reductions’ were part of ‘aggressive’ cost management plans. to return to profitability by the end of the year. “The first quarter results reflect an environment that may prove to be one of the most challenging our industry has ever seen,” LoanDepot founder and executive chairman Anthony Hsieh said on a call with analysts. in investment.

Mr. Cooper

Rising mortgage rates are making what has traditionally been Mr Cooper’s core business – collecting mortgage payments from nearly 4 million borrowers – much more profitable. But they also limit the company’s ability to take out new mortgages, prompting the company to lay off 250 workers in the first quarter of 2022 and another 420 workers in the second quarter. At the end of 2021, Mr Cooper had 8,200 employees, so the 670 redundancies announced so far mean the company has reduced its workforce by at least 8% since then.

Pennymac

Pennymac, the nation’s second-largest mortgage lender, laid off 236 workers at six California locations in May, citing falling demand for home loans. Pennymac employed 7,208 workers worldwide at the end of last year.

red fin

Real estate brokerage Redfin’s bid to expand its presence in the mortgage industry by acquiring San Francisco-based Bay Equity Home Loans for $135 million also meant pink slips for 121 existing workers in supporting sales, capital markets and operations of Redfin’s existing mortgage business.

REX Real Estate

After implementing two rounds of layoffs last year, discount brokerage REX Real Estate closed two offices in Texas in May. Although reports suggest that REX Real Estate has laid off all of its agents and is preparing to close, REX co-founder and COO Lynley Sides told Real Trends that the company has turned to brokering deals for the institutional owners in California and Florida.

Rocket Companies Inc.

In an effort to avoid layoffs, the nation’s largest mortgage lender, Rocket Companies Inc., made buyout offers in April to about 2,000 workers. If accepted, the buyouts should save Rocket about $180 million a year, executives said on a first-quarter earnings call in May.

Side

Claiming it grew faster than it could train, support and develop new hires, real estate tech startup Side notified about 10% of its employees on June 1 that they were out of work. Side, which provides branding and technology to independent brokers and often serves as the broker of record for high-performing agent teams, said last summer it was on track to go public after obtaining unicorn status and raised over $250 million in funding.

Tom

A mortgage fintech launched by former Zillow executives with an exclusive focus on home loans, Tomo cut its workforce by nearly a third on May 31. CEO Greg Schwartz said Tomo is postponing plans to expand into additional markets for now.

Wells Fargo

Wells Fargo, which saw its mortgage production falter as it closed retail branches, laid off an unspecified number of workers in its home loans division in April, due to “cyclical changes in the larger environment. off home loans,” the company told Inman. . In the first-quarter earnings report, Wells Fargo executives said they plan to cut spending with revenue from home loans down 33% from a year ago, at 1.49 billion dollars.

Get Inman’s Extra Credit newsletter delivered straight to your inbox. A weekly summary of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

Email Matt Carter

Share.

Comments are closed.