Over the course of this year, thousands of people working in the mortgage business have been laid off as rising interest rates drive mortgage originations lower and the economics of the mortgage business become tougher for companies to survive unscathed.
JPMorgan Chase, Wells Fargo, Movement Mortgage, loanDepot, The Money Source, HomeStreet, Capital One, and others have laid off employees, eliminated their jobs, or closed entire divisions in just the last few months alone.
Now, Gateway Mortgage Group is joining that list and becoming the latest mortgage company to lay off a number of employees.
The company told HousingWire this week that it is making the “difficult decision” to shutter all eight of its retail branches in California and lay off 25 employees, as the company shifts its focus to markets that it views as more central to its operations.
Gateway, which is based in Oklahoma and was founded by soon-to-be Governor of Oklahoma Kevin Stitt, said that it has been adding employees in the last year, but feels that the “uniqueness” of the California market makes it a tough one to operate successfully in.
But the company said that it doesn’t plan on abandoning the Golden State entirely.
“Due to the complexities and uniqueness of the California market, Gateway is closing its retail origination offices in the state. However, California presents a strong opportunity for our correspondent business and we plan to be heavily active in that space,” the company said in a statement provided to HousingWire.
According to the company, Gateway opened 12 new offices in eight states in the last quarter, bringing its total to 35 new offices in 2018. Additionally, the company added 161 new jobs in the third quarter, 309 for the year, pushing its total number of employees to 1,225.
“At Gateway Mortgage Group, we are continually evaluating all aspects of our business; our processes, the products we offer and the markets we serve. As part of our overall strategy for long-term growth and efficiency, we have elected to close our California branches,” Scott Henley, Gateway executive vice president and national retail sales manager, said in a statement.
“This strategic shift allows us to focus our attention and resources on core markets that complement our current business model, provide better efficiencies and represent more suitable growth opportunities,” Henley added. “We remain true to our core values and our priority is to empower originators with a best-in-class platform while enabling homeownership across the nation.”
As stated above, the closings will lead to layoffs for 25 Gateway employees.
“Unfortunately, this decision impacted 25 people. Gateway is offering enhanced severance benefits to make this transition as smooth as possible,” the company said. “While we do not make decisions like these lightly, we appreciate the many contributions these employees made to our organization and we are committed to treating all employees with the utmost respect as they transition to new opportunities.”
With that, Gateway becomes simply the latest in the mortgage business to lay off a number of employees. Unfortunately, it won’t be the last.