Nation’s third largest mortgage lender will lay off 150 Texans before Christmas
As interest rates have risen, the mortgage market has cooled, despite hot home sales just a year ago. That’s led to layoffs among lenders, including Home Point Financial. The nation's third largest lender just announced 526 new layoffs come November: 150 of those will be in Texas.
Mike Davis, economics professor at SMU’s Cox School of Business, blamed High Point Financial’s significant layoffs on rising interest rates. He said rising rates, which may go up again soon, mean two things for mortgage lenders. Neither of them are good.
First, fewer houses get sold. Next, and more importantly, he said the business of refinancing starts to fade away. And that’s true regardless of whether someone is trying to get a lower interest rate or hoping to pull cash out of their house.
“To be a mortgage lender is kind of like to be an umbrella salesman. You know, when business booms, it really booms," Davis said. "The mortgage business was booming and these mortgage lenders wanted to have boots on the ground to capitalize on that. And now, you know, the rain has stopped. Nobody's buying umbrellas. Nobody's refinancing their mortgages.”
A total of 150 of the 526 High Point layoffs are in Texas.
In a statement, the company said: “Over the last several months, we have executed multiple strategic actions to minimize the human impact as much as possible, but continually worsening market conditions make this additional step necessary.”
High Point added the move would save the business more than $100 million a year.