Flagstar Bank, one of the nation’s largest retail mortgage lenders, has recently announced plans to cut an estimated 400 jobs in its retail mortgage operation. The layoffs were attributed to falling mortgage originations and reduced demand for lending services. The Michigan-based FDIC-insured bank will move to a centralized, digital processing model. This move will eliminate much of the bank’s retail mortgage workforce, but will help centralize processing across the entire mortgage division.
Flagstar Bank’s move to digital processing is one of many changes the larger banking industry has experienced in recent years. Many banks of all sizes have shifted to automated processing that cuts costs, improves accuracy and provides more efficient mortgage loan origination. As more banks make the transition to this model, manual processes are becoming fewer and fewer.
Online lenders have also made a dent in the traditional retail mortgage industry, allowing borrowers to shop for loans and get approved in as little as minutes. This has reduced the cost of origination for many banks, which in turn has made for fewer jobs in the retail mortgage segment.
Flagstar Bank’s move to a digital processing model is a major shift in the banking industry, but it is not the first such move by a major retail lender. Banks of all sizes are making the move to a centralized process to reduce costs, minimize paperwork, and speed up the process for their customers. Despite the layoffs at Flagstar Bank, the institutional banking sector as a whole will likely continue to benefit from increased efficiencies provided by this shift.
You can read this full article at: https://www.housingwire.com/articles/flagstar-bank-makes-big-cuts-to-retail-mortgage-operation/(subscription required)
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