US Fed comes right on time with the crisis support program announcement. How does the stock market react?
American mortgage industry experiences job losses
Information is not investment advice
With mortgage applications heading south to their lowest value since late-2014, the American home lending sector is currently experiencing a key overhaul in how it’s getting on and also manages staffing levels.
Call-center staff members handling customer refinance requests turn out to be the most vulnerable due to the fact that rates have started soaring, as experts pointed out.
Those applications have declined to their lowest result since late 2000, as follows from a seasonally updated index provided by the Mortgage Bankers Association. As a matter of fact, in the first quarter, refinancing made up nearly 37% of mortgage originations, tumbling from 75% at its maximum in 2012.
The given dive has occurred because interest rates on most 30-year mortgages have rallied to 5.1%, which is the highest outcome since February 2011.
By the way, those homeowners who have already borrowed since then don’t have an opportunity to save funds by refinancing.
For the 2007-2009 financial meltdown, American financial institutions laid off mortgage staff members because demand froze and therefore they experienced devastating losses in the business. Then, bank executives found themselves hiring folks just to handle delinquent loans, while mortgage firms staffed up to refinance loans because interest rates inched down.
However, this time, the dive in mortgage workforce might be stickier due to the fact that key lenders as well as their technology-enabled counterparts, including loanDepot Inc and Quicken have attempted to automate much more of their business.
As a matter of fact, the industry employs approximately 350,000 folks - the same number as in 2002, as follows from government labor data collected by the MBA. As for employment, it hit 500,000 at its climax during the housing bubble.
Wells Fargo and JPMorgan Chase & Co appeared to be the two largest American mortgage lenders for the first six months of 2018, representing 7% of the market. They have cut respectively 600 and 400 mortgage jobs.
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