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Mortgage industry workforce plummets 51% since 2006

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The number of employees in the mortgage industry declined 51% between February 2006 and February 2011, which equates to a loss of 257,000 jobs. February 2006 marked the peak of employment in this sector at 505,000 individuals. The current mortgage workforce contains 248,000 employees, according to Bureau of Labor Statistics data compiled and released by the Mortgage Bankers Association. This figure is down 5.9% from the year ago period and is the lowest level of employment since late 1997. In the first two months of this year, almost 12,000 jobs in the industry have been dissolved, according to the MBA release. The MBA said 191,300 workers in real estate were employed in February, along with 56,700 loan brokers. Those figures are down 5.5% and 7.2% from one year earlier, respectively. Different professions around the industry are feeling the ramifications of job loss. According to Chicago-based trade group the Appraisal Institute, the number of appraisers nationwide has declined about 8.1% since 2007, and that trend is expected to continue. Four years ago there were more than 121,000 active appraisal licenses and certificates held by about 98,500 appraisers, compared to 110,000 certifications for 90,500 appraisers in 2010. The number of active lenders in the industry is also dwindling. As of June 30, 2010, there were 7,821 commercial, savings and foreign banking institutions in the United States, according to data from the American Bankers Association. Lenders consolidated throughout the decade, as the latest figure is down 21% from 9,907 banking institutions in 2000. Wells Fargo (WFC) said a lack of demand is driving layoffs in the housing industry. The banking giant recently laid off 1,900 employees from its mortgage division after home loan applications fell 19.4% between the third and fourth quarters of 2010. Homebuilders echoes that sentiment but many remain cautiously optimistic as the spring selling season approaches. The National Association of Home Builders index rose to 17 in March. The NAHB and Wells Fargo survey builders to gauge perceptions of the new, single-family home market for the next six months. A score higher than 50 indicates more builders view the market as good than poor. Builders are more optimistic than previous month, "however, the same factors that have been weighing down the market are still very much in play," commented NAHB Chairman Bob Neilsen, "particularly competition from short sales and foreclosures, consumers' inability to sell their existing home, appraisals that are coming in below construction cost due to the inappropriate use of distressed properties as comps, and restrictive lending conditions for both buyers and builders." Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR. Disclosure: The author holds no relevant investments.

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