The new year has brought a fresh round of mortgage industry layoffs to the Charlotte region as lenders continue to adjust to higher interest rates and fewer delinquent loans.
Last year, banks laid off hundreds of Charlotte-area mortgage employees and thousands nationwide as they scaled back operations that handled refinancings and delinquent borrowers.
Charlotte likely hasn’t seen the last of the mortgage industry job cuts, said Guy Cecala, CEO of Inside Mortgage Finance, a mortgage industry publication. Across the country, lenders continue to report declining mortgage volumes as rising interest rates reduce homeowner demand to refinance, he said.
“As long as volume continues to fall, which it is, that’s pushing them to reduce head count,” he said.
“We haven’t bottomed out yet. The problem is Charlotte doesn’t have a dramatically different mortgage environment than Omaha, Neb.; Phoenix; even San Francisco. They’re all seeing drops in volumes.”
Among Charlotte’s most recent mortgage layoffs:• SunTrust Banks said it told 19 underwriting and closing employees in Charlotte last week that their positions are being eliminated. A spokesman said the layoffs are part of an initiative, announced in October, to eliminate 800 jobs nationwide amid lower demand to refinance. The Atlanta-based bank continues to have mortgage operations in Charlotte employing roughly 60 people, the spokesman said.
• Bank of America said last week it has cut a “small number” of mortgage jobs in the Charlotte area. A bank spokesman declined to provide an exact number.
• Citigroup announced last month it is closing its default mortgage servicing unit in the Fort Mill, S.C., area, affecting up to half of the 800- to 900-person workforce.
Banks ramped up mortgage staffs in recent years as borrowers sought to lock in at historically low interest rates. Higher rates in the past year have curbed demand to refinance.
According to mortgage giant Freddie Mac, the average rate for a 30-year mortgage was 4.43 percent in January, up a percentage point from a year ago but still near historical lows.
Banks have also slashed employees working with homeowners who had fallen behind on mortgage payments. Since the financial crisis, banks are handling fewer bad loans.
Last month, the Mortgage Bankers Association lowered its forecast for mortgage loans to be made in 2014. Mortgages for purchases are expected to total $677 billion, an increase of 3.8 percent over 2013. Refinancing volume is expected to total $440 billion, about 60 percent lower than last year, the association said.
“The mortgage market is in a tough place right now because refinancing activity has fallen off very sharply over the last year, and purchase volume is still very slow to recover, reflecting the frustratingly slow recovery in the housing market,” said Wells Fargo economist Mark Vitner.
The Charlotte region, like elsewhere, needs more job growth if home purchases are to rise, Vitner said.
Janet Gaglione, president of the Charlotte Regional Mortgage Lenders Association, expects additional mortgage job cuts in Charlotte.
“I think some companies are holding off to the bitter end until they see that the purchase business growth that they anticipate is either there or not,” she said.
She said some consumers aren’t in a position to buy because they haven’t fully recovered from the recession and haven’t saved enough for down payments. The low number of homes for sale in the region is also holding back home purchases, she said.
Industry insiders say the competition for mortgage jobs in the Charlotte area is intense.
Chris Cope, president of Allen Tate Mortgage, said his company has been flooded with resumes since Thursday, when it advertised less than half a dozen mortgage job openings.
“I bet I’ve seen 100 resumes since Thursday afternoon,” said Cope, president-elect of the Mortgage Bankers Association of the Carolinas.
“You think to yourself, ‘I would have loved to have you a year and a half ago.’ ”
Lynda Mackey, an underwriter who lost her job in Charlotte last year when Fifth Third Bank laid off an undisclosed number of mortgage employees, said she has been unable to find another job.
Mackey, who said her last day with the bank was in September, “started looking everywhere” for jobs that required experience in the financial sector. She said she even applied for loan processing jobs that paid less than what she made as an underwriter.
“At that point, it didn’t matter, even if I had to downgrade,” she said. “It’s just been extremely hard.”