Thousands of lending jobs are now at risk as the number of refinances continue to fall, threatening to sink to their lowest level since 2000.
Interest rates continue to increase, and the Mortgage Bankers Association recently predicted the Federal Reserve will raise the federal funds rate four times in 2018 and twice more in 2019. Mortgage interest rates are expected to continue rising for the foreseeable future, meaning refinances will continue to grow less and less attractive.
Now, one expert, Inside Mortgage Finance Chief Executive Guy Cecala, said overall mortgage originations could see a decrease of 15% to 20%, leading to a job loss of about 10% within the mortgage industry, according to an article by Alistair Gray for Financial Times.
But while smaller lenders may see significant layoffs, lenders may find more luck by joining larger companies that are looking to expand.
From the article:
Larger lenders view the market conditions as a chance to snap up staff from shrinking rivals. Jay Farner, chief executive of Quicken Loans, which has become the country’s second-largest mortgage lender by volume, told the Financial Times: “You’ll see opportunity to acquire talent. As other companies see a downturn, we welcome people into our company.”
Mr Farner said: “We have a pretty unique business model that allows us to manoeuvre through challenges like this. For the broader industry, this will be a more challenging year.” He added that the pressures meant competitors were “reducing margins to earn more business”.