CashCall, one of the larger mortgage firms in Orange County, Calif., is about to get a lot smaller, as lenders across the nation scale back on falling refinance activity. Bloomberg has more on the situation:
Lenders "have the mindset to be able to downsize quickly," said Jeffrey Ingham, an Irvine-based senior managing director at brokerage Jones Lang LaSalle Inc. "If you churn out a thousand refis a month and suddenly you go to a hundred, you have the ability to scale down. Some lenders in 2006 and 2007 had the mindset that the good times would never end. Not so today."
"Mortgage lending has always been a cyclical business, but more so since the crisis," said Anthony Hsieh, CEO of LoanDepot. "With new lending regulations and lack of certainty about how fast interest rates will rise, “mortgage lenders are trying to stay as agile as they possibly can. That means they are looking for flexibility with fixed costs, such as rents.”