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Rising mortgage rates pressure smaller Charlotte lenders

More Information

  • U.S. Bank finds growth in Charlotte
  • Wells steps up student-loan business
  • About U.S. Bank

    • Headquarters: Minneapolis

    •  Holding company: U.S. Bancorp

    • CEO: Richard Davis

    • Assets: $353 billion (fifth-largest U.S. commercial bank)

    • Deposits: $252 billion

    • Territory: 3,087 retail branches in 25 Midwestern and Western states; national footprint for wholesale banking, commercial real estate lending and other businesses.

    • 2012 net income: $5.5 billion

    • Employees: About 65,000 at the end of 2012.



Rising mortgage rates have pushed big banks to lay off thousands of workers around the country – but smaller lenders are feeling the pinch as well.

Mortgage bankers in the Charlotte area say they’ve had to change their business models and retrain workers as a flood of refinance applications has steadily receded. At least one mortgage company has had to lay off workers.

For more than a year, historically low interest rates had sent a flood of homeowners to lenders big and small looking to lock in the rates. That started to change earlier this summer.

Average mortgage rates stood at 4.73 percent last week, according to data from the Mortgage Bankers Association – a full point higher than they were just this May.

Wells Fargo announced last month that it was slashing more than 2,300 jobs nationwide in the division that processed mortgage applications – including 284 in Charlotte. Bank of America followed suit with 1,000 job cuts primarily in Ohio.

Janet Gaglione, president of the Charlotte Regional Mortgage Lenders Association and an officer at Monarch Mortgage, said small and mid-size lenders are in a different position. While big banks rapidly increase their hiring during the good times with the expectation of laying off employees once the business goes away, companies like hers try to keep a steady workforce.

But that doesn’t mean there hasn’t been any impact. At least one company – Wyndham Capital Mortgage in Charlotte – has laid off workers, according to a document obtained by the Observer. Wyndham executives did not return repeated calls for comment.

At Charlotte-based GoodMortgage.com, refinances had made up more than 60 percent of the business. But seeing changes ahead, the company began shifting its advertising budget and resources toward new home purchases in an attempt to start making up for an anticipated loss of business.

Workers who had been processing refinances are now being trained to step into home-purchase mortgages.

“It’s a pretty big deal,” said Keith Luedeman, CEO of the lender that’s been ranked several times on the Inc. 5000 list of the fastest-growing private companies. He said he didn’t expect new home purchases to completely make up the volume provided by the refinances, but he said he’s hopeful an improving economy will lead to people moving for new jobs and open up the housing market. GoodMortgage.com is also planning to expand into new states to look for growth.

Charlotte-based Movement Mortgage says it has remained stable by staying committed to new home purchases through the business cycle, CEO Casey Crawford said.

“We started the company as a purchase-centric mortgage lender back when it was not cool five years ago,” he said.

About a fifth of their business had come from refinances, and that’s seen about a 10 percent reduction, Crawford said.

But compared with the big banks, “The impact is far less dramatic,” he said.

Dunn: 704-358-5235 Twitter: @andrew_dunn
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