Of recent, the headlines have been filled with news of layoffs and closures occurring among mortgage banks and lenders. The mortgage-finance industry has been badly hit by the rising interest rates ignited by the Federal Reserve’s tightening policies. Mortgage lenders have also revealed that they are set to lay off more employees.

The Independent Mortgage Bank (IMB) New American Funding rejected 240 employees this week. Athas Capital Group is also closing its doors and laying off more than 200 employees. Recently, an Inside Mortgage Finance analysis of the U.S. Bureau of Labor Statistics revealed that independent mortgage banks reduced some 8,200 jobs. More careers in mortgage banking are expected to sink in the coming months. However, it has been stated that most of the job losses that have occurred are supporting jobs, while loan officer jobs are the last to be discarded.

These cutting started about three months ago, and only about 440,000 to 450,000 people were employed at the peak of the industry last year. There were also about 300,000 before it started reducing during the pandemic. So, it seems there are 150,000 people in excess, of which a lot of them are origination officers, while loan officers are just starting to be affected. It has been projected that the layoffs will eventually reach 40% to 50% of the independent mortgage bank industry’s entire mortgage-origination staff and around one-third of the industry’s employment in total.

This situation is actually terrible for some in the industry. The complete headcount of loan officers nationwide in 2021 was 353,119, with 234,070 loan officers who have originated three or more loans. They increased from 263,494 loan officers in 2019, showing about a 30% increase between 2019 and 2021. However, as of today, they have been reduced to the levels of 2019 loan officers’ employment, and it has been projected that the figures might reach a 40% to 45% reduction in overall LO headcount compared with 2021. To get more details, click here.