JPMorgan Chase is laying off roughly 400 employees in its consumer mortgage banking division.
According to the Wall Street Journal, people familiar with the matter said JPMorgan made the cuts because of slowdowns in some parts of the mortgage market. This is what JPMorgan had to say about the layoffs:
"Our servicing portfolio is performing well, with delinquencies accounting for less than two percent of all loans–a 22% decline from last year. When fewer people are struggling with their mortgages, and more people are using self-service channels, we can adjust staffing. Like all companies, we are making improvements to operate more efficiently and make slight adjustments to resources to best meet the needs of the market," a spokesperson for the company said in an email.
The WSJ reports the jobs lost are located in a handful of cities including Jacksonville, Florida; Columbus, Ohio; Phoenix, Arizona; and Cleveland, places where mortgage servicing has fallen off significantly. Mortgage delinquencies, for example, are at their lowest level since the last recession.
Chase remains one of the largest mortgage lenders in the U.S., employing roughly 34,000 mortgage banking employees. According to Inside Mortgage Finance statistics for the second quarter, Chase originated $16 billion in purchase mortgages, below only Wells Fargo.
Slim pickings in the purchase mortgage market and a major downturn in the refinancing market have put the hurt on mortgage operations this year. Wells Fargo laid off about 650 mortgage-related employees in August citing the low-volumes as the catalyst.
Just yesterday, Movement Mortgage cited the same issue and initiated its third round of layoffs this year, cutting another 180 employees from its roster.
Rising interest rates and abysmal affordability conditions are commonly cited as the main actors behind the mortgage volume blues companies are singing these days, and so far, a silver-bullet for increasing originations has yet to emerge.
[Update: This article has been updated with a statement from Chase.]