Mortgage Broker Employment Hits Eight Year Low

March 9, 2009 No Comments »

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Mortgage broker employment fell to an eight-year low in January, according to a report from National Mortgage News.

During the month, there were just 73,600 loan broker positions reported industry-wide, down 20 percent year-over-year.

The sharp decrease in employment could be attributed to continuing contraction in the wholesale mortgage market, with very few (if any) major operations still in business.

In late 2008, Downey Savings, MortgageIT, and HSBC all shuttered their wholesale lending departments, displacing scores of employees.

And in mid-January, Chase announced the closure of its wholesale business to focus on its retail growth via its acquisition of Washington Mutual.

Oddly enough, but in typical Richard Branson fashion, Virgin Money last month announced it was entering the wholesale mortgage space in the United States, offering conventional and FHA loans “with a twist.”

However, most large banks and lenders have pulled out of the broker-originated market, forcing many loan officers and mortgage brokers to mull their options.

The result has been a mass exodus toward correspondent lending, though one investment banker told National Mortgage News banks providing such funding have considered raising net worth requirements on third-party lenders, which may lead to even more closures and layoffs.

But it’s not just a third-party lending problem; total employment in the mortgage industry slipped to 271,800 full-time positions in January, also a multi-year low, according to the latest Bureau of Labor Statistics.

Total residential finance employment was off 18 percent compared to the same period a year earlier.

Check out the latest list of closed lenders, mortgage layoffs and mergers.

(photo: bredgur)

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