The mortgage industry continues to shed jobs as rising interest rates bring the pandemic-era refinancing boom to an end, with top lenders Rocket Cos. and Wells Fargo the latest to announce plans to downsize.
Rocket Cos. subsidiaries Rocket Mortgage and Amrock, Rocket’s title and settlement services company, have offered voluntary buyouts to about 8 percent of Rocket’s workforce, a Rocket spokesman confirmed to Inman. As of Dec. 31, 2021, Rocket Cos. employed 26,000 team members in the United States and Canada.
The buyout offers to approximately 2,000 workers — which were primarily extended to Rocket Mortgage’s operations team, and to various groups within Amrock — include several months of compensation, six months of health coverage, payment for banked time off and early vesting of stock incentives provided to employees as part of the company’s 2020 initial public offering.
Rocket employees who accept buyouts will also receive outplacement services including one-on-one career coaching, resume building and job search assistance, the company said.
Mike Malloy, chief administrative officer at Rocket Central, made details of the buyout available to employees Monday. Rocket Central provides human resources services for all of Rocket Cos., which include Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto and Amrock.
“As a result of today’s market, some team members have told us they are considering a move to another position or a completely different industry,” Malloy said in a statement provided to Inman. “At the same time, our career growth options in certain areas of Rocket Mortgage and Amrock are limited right now, while the housing market normalizes after two years of unprecedented volume. With this in mind, we are focused on giving our team members pathways to career success.”
At the height of the refinancing boom, Rocket Mortgage — the nation’s biggest mortgage lender — closed $320 billion in home loans, generating $15.65 billion in revenue and $9.4 billion in profits. Although Rocket boosted mortgage originations by another 10 percent in 2021, less profitable purchase loans accounted for a greater proportion of the mix, and 2021 net income fell by 35 percent, to $6.07 billion.
Rocket kicked off the new year by announcing leadership changes across several of its businesses and repositioning itself as a fintech platform, with the stated goal of surpassing rival Wells Fargo to become the number one retail provider of purchase mortgages in the next 12 to 18 months.
Wells Fargo, which has seen its mortgage production fade as it closes retail branches, made 27 percent fewer loans to homebuyers in 2021. As of March 31, Wells Fargo operated 4,705 retail bank branches, down 2 percent from the fourth quarter and 5 percent from a year ago.
In reporting first quarter 2022 earnings April 14, company officials warned that they planned to cut costs in the company’s home lending division as originations continued to wane.
This week the San Francisco Business Times, citing anonymous posts on TheLayoff.com, reported that Wells Fargo has begun laying off underwriters, loan processors and credit administrators in locations including Des Moines, Iowa; Phoenix; San Antonio; Raleigh, North Carolina; Charlotte, North Carolina; Minneapolis; Portland, Oregon; and Roanoke, Virginia.
A Wells Fargo spokesman confirmed to Inman that Wells Fargo laid off workers last week, but said the company isn’t providing specifics at this time.
“The home lending displacements last week were the result of cyclical changes in the broader home lending environment,” Wells Fargo spokesman Tom Goyda said in a statement. “The employees affected by these changes have each been an essential part of our success. We are carrying out displacements in a transparent and thoughtful manner and providing assistance, such as severance and career counseling. Additionally, we are committed to retaining as many employees as possible and will do everything we can to help them identify other opportunities within Wells Fargo.”