It looks like the great refinance bonanza is officially over.
Wells Fargo, the top mortgage lender in the nation, notified 4,500 retail mortgage employees during the first quarter that their jobs would soon be no more, according to a company report.
Over 2,000 of these full-time employees remained on payroll as of the end of the first quarter, but will be “displaced” in the second quarter.
The San Francisco-based bank took on scores of new employees after mortgage rates hit rock bottom, but as mortgage volume slowed in the first quarter, corrective action was necessary.
Per the company’s quarterly supplement, residential mortgage loan origination is one the “largest variable cost businesses” at the bank, and so thousands now need to look elsewhere for employment.
The mortgage lender saw home loan applications fall to $102 billion from $158 billion a quarter earlier as the mortgage application pipeline shrunk to $45 billion from $73 billion at the end of 2011.
Loan origination volume plummeted to $84 billion from $128 billion.
Still, the company recorded record earnings of $3.8 billion, up 10 percent from the fourth quarter and 48 percent year-over-year.
Since 2009, Wells has extended more than 665,000 trial and permanent loan modifications to struggling homeowners, with over $3.9 billion in forgiven principal and a re-default rate “consistently better than the industry average.”
Despite the originator layoffs, “home preservation staff” has grown to 16,000, with 10,000 new hires since 2009.