Another round of mortgage industry layoffs will hit Charlotte this summer.
Wyndham Capital Mortgage is permanently laying off 48 employees of its local headquarters near Southpark, according to a notice filed with the NC Department of Commerce on Tuesday. The layoffs will begin Aug. 1, according to the documents.
The layoffs will affect both remote and in-person workers.
Wyndham did not immediately respond to a request for comment Wednesday.
It’s the latest in a series of job cuts by local home lenders as the mortgage industry suffers a sharp drop in business alongside rising interest rates.
The last round of job cuts was reported May 24, when Nashville-based FirstBank told the N.C. Commerce Department it would lay off about 74 workers in Charlotte. The cuts were part of “internal restructuring” moves that included discontinuing FirstBank’s digital mortgage channel Real Genius, the bank told The Charlotte Observer last week.
The layoffs included more than 20 roles in mortgage underwriting, processing, sales and other areas, according to the WARN Notice.
Under federal law, companies must file Worker Adjustment and Retraining Notifications, also known as WARN notices, when they make mass layoffs or close plants.
Other mortgage firms make layoffs
In Charlotte and beyond, mortgage lenders big and small have been battered by a sharp rise in interest rates on home loans.
A number of lenders with local operations have already made cuts this year:
- Wells Fargo laid off an undisclosed number of employees in its home lending business in April due to market conditions, the bank confirmed to American Banker at the time.
- Movement Mortgage, based near Charlotte in Indian Land, S.C., laid off about 170 employees this spring, according to a report from trade publication HousingWire.
- And online mortgage lender Better.com, in its third round of job cuts in a five-month period, laid off an estimated 1,200 to 1,500 employees across the U.S. in April, TechCrunch reported.
Rates rise, loans drop
When interest rates dropped to historic lows during the pandemic, many borrowers refinanced their mortgage to secure a better interest rate and lower monthly payment.
But when mortgage rates started to rise ahead of the Federal Reserve’s interest rate hike this spring, fewer homeowners moved to refinance.
The resulting sharp drop in new loans has left lenders almost “no choice” but to make cuts, Guy Cecala, executive chair of industry publication Inside Mortgage Finance, told the Observer last week. “A 30 to 40% drop in mortgage activity — there’s no real good way to offset that other than reduce your headcount,” he said.
A cooling housing market could be good for homebuyers, many of which may have struggled with rapid sales and sky-high prices in the last few years.
But there’s also a chance that a slower housing market could be a sign of a broader economic downturn, some economists warn.