After going on a hiring spree and nearly doubling the company’s payroll to 1,000 employees in less than a year, Keller Williams’ lending arm, Keller Mortgage, has laid off 150 new recruits — close to one-third of its recent hires.
The 150 workers who were laid off held “junior roles,” and were “part of a program created about a year ago to support efficiency and talent development,” said Carl Liebert, CEO of Keller Mortgage’s parent company, KWx, in an internal company email obtained by Inman.
Liebert said the program “was a way to support significant anticipated business volume and cultivate talent within Keller Mortgage,” with a goal of developing “a pipeline of future experts who would be trained for more independent and specific roles in mortgage fulfillment, like processing, underwriting and closing.”
But a recent evaluation of the program, “found it was not having the intended impact on the client experience or the anticipated success for the team members and those in more senior roles who were guiding them,” Liebert said.
Many mortgage lenders who staffed up to handle last year’s refinancing boom could be facing similar decisions as interest rates rise and refi business dries up.
But Keller Mortgage, as the lending arm of the nation’s largest real estate franchisor by agent count, does most of its business providing purchase mortgages to homebuyers. Of the approximately $5.63 billion in home loans originated by Keller Mortgage in 2020, 69 percent of that volume was in purchase loans, according to an analysis of Home Mortgage Disclosure Act data by iEmergent.
So when Keller Mortgage started rapidly scaling up its workforce last summer, the company may have been anticipating growth in purchase mortgage lending that hasn’t fully materialized.
Investing in workers ‘for the long haul’
In August 2020, Keller Mortgage recruiters launched @KellerMRecruits, a Twitter account that kept up a steady drumbeat of tweets through the fall and spring seeking not only experienced mortgage loan officers, underwriters, processors, and closers, but entry-level employees and workers “at all levels of experience.”
Although Keller Mortgage is based in Dublin, Ohio, most of the openings were for remote workers — adding to the appeal for some home-bound job seekers.
A Sept. 28, 2020 tweet promised, “At Keller Mortgage we want to invest in YOU — not just while interest rates are low but for the long haul. We value longevity & are excited to continue to grow our team!”
Several posts highlighted Keller Mortgage’s ties to Keller Williams, and the potential business that could generate for loan officers. Keller Mortgage’s ZeroPlus loan program waives lender fees for homebuyers represented by Keller Williams agents, and provides a discounted rate and $1,000 closing credit.
“Our relationship with Keller Williams Realtors (@kwri) has continued to increase, which means we have more qualified leads than ever — so we need to hire more Loan Officers!” Keller Mortgage recruiters tweeted on Nov. 18, 2020. “Reach out today to learn how you can join the Keller Mortgage Family!”
As the spring 2021 homebuying season picked up steam, so did Keller Mortgage’s recruitment efforts.
“Are you looking for a job in the mortgage industry where YOU can help someone get into their dream home?” @KellerMRecruits tweeted on March 30. “Head over to the careers page in our bio or DM us to learn more about these opportunities.”
Over on LinkedIn, a Keller Mortgage talent acquisition specialist posted in May 2021 that she was, “Humbled to announce Keller Mortgage has reached 1,000 employees – DOUBLED in size since June 2020 at 530 employees. Hats off to each of my teammates on this milestone!! Join the Keller Mortgage family!”
But the tweets from Keller Mortgage recruiters had already begun to slow to a trickle, before ending in May. The Keller Mortgage talent acquisition specialist who posted on LinkedIn in May was laid off in July, according to her bio.
Today, Keller Mortgage lists nine job openings on Lever, in finance, HR, analytics, and risk management. There are no openings for mortgage originators, underwriters, or processors.
‘They just grew faster than there was work for’
“You could tell by the volume of work that was out there, that there was not enough to go around,” a former Keller Mortgage employee told Inman. “I think they just grew faster than there was work for.”
Before the layoffs were announced last week, the former employee said, the recent departure of two supervisors in the underwriting department “had a big impact on morale.”
But the layoffs came as a surprise, the former Keller Mortgage employee said. About three weeks ago, after a meeting of executive leadership with the underwriting team, “We were told everything was fine. Multiple people said, ‘Don’t worry, your jobs are safe.’ ”
Two weeks ago, underwriting supervisors heard the same thing from management, the former employee said. But last week, the affected employees and their colleagues were informed of the layoffs.
“My personal opinion is there are deeper problems … they’re still overstaffed, by a lot,” the former Keller Mortgage employee said. “I think they have other plans to grow the business that are not currently producing the volume that is needed.”
Liebert, who was appointed as CEO of Keller Mortgage parent company KWx in October, said in his internal email announcement that the decision to eliminate 150 positions was difficult.
“When we make really tough decisions that affect people, it doesn’t come without serious consideration and contemplation,” the Oct. 7 email to Keller Mortgage employees said. “This decision was difficult for everyone, because it involved people — their jobs, careers and lives. We don’t take that responsibility lightly.”
“We offered severance benefits to make this transition as smooth as possible,” KWx spokesman Darryl Frost said in an email sent to Inman on Wednesday. “We are also helping affected employees pursue new career opportunities within our Keller Williams ecosystem.”
Liebert has said his first job as KWx CEO is to pull all of the Keller Williams brands — Keller Williams Realty, Keller Williams Worldwide, Keller Offers, Keller Mortgage, and Keller Covered — into the newly-created holding company’s structure.
Once that’s accomplished, many observers say KWx will be in a better position for an initial public offering, should the company choose to go that route.
In reporting second quarter results, Keller Williams said it grew by 4,277 real estate agents worldwide, and that its agents in the U.S. and Canada closed $145.3 billion in sales volume, up 70.3 percent from the same quarter a year ago.
But the company provided no information about Keller Mortgage’s performance. If Keller Williams agents preferred to send their homebuyer clients to other lenders, Keller Mortgage would have been hard pressed to equal that growth.