Mortgage lenders across the country have been fire people in recent months, and the Capital Region has not been spared.
Fewer home sales and less demand for refinancing, both driven in large part by significantly higher interest rates, have spurred the cuts.
Baton Rouge-based GMFS Mortgage has hired more than 100 additional people to handle robust demand in 2020 and 2021, CEO Tee Brown says. But it had to lay off about 120 people last year, he says, bringing staffing back to the same level as it was in 2018.
The company’s revenue shows why. Brown says GMFS did about $2.3 billion worth of business last year, compared with about $4 billion each of the previous two. He predicts about $2 billion this year and expects refinancing to remain slow.
Area Home Lending in Baton Rouge laid off about half the staff, says CEO Jason Guerin.
“We did less than half the volume in 2022 than we did in 2021,” he says.
However, Guerin is seeing business pick up a bit earlier this year, which he attributes to people who can’t put off moving, even if it’s not their preference to buy now. Sellers are beginning to make some concessions to buyers, and assuming the Federal Reserve changes course on its interest rate hikes, there could be a big surge in refinancing in 2024, he adds.
Wells Fargo, Freedom Mortgage, Prosperity Home Mortgages and the mortgage division of Citizens Bank are among the leading lenders that announced layoffs during the fourth quarter.