Sacramento, California-based mortgage lender Summit Funding Inc. plans to make a round of layoffs in late November that will affect 72 employees, according to a document filed with the state’s Employment Development Department.
“With the demand for mortgage services falling to its lowest level in 22 years, and the resulting impact of this market condition on our business, we will be laying off many employees,” Sherry Meneley, director of human resources, wrote in a Worker Adjustment and Retraining Notification (WARN).
The layoff, set for Nov. 23, will affect 36 employees working in the headquarters in Sacramento and 36 remote staff in nine states, such as Alabama and Colorado, reporting virtually to the headquarters.
Summit is cutting, among others, 11 closing jobs, 10 underwriting staff, nine funding employees and eight senior underwriters, the WARN shows.
Todd Scrima, the company’s CEO, founded the mortgage lender in 1995. The company offers conventional, FHA, VA, USDA, jumbo and reverse mortgages.
Messages left with executives at Summit were not immediately returned.
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Summit originated $5.2 billion in the last 12 months through 268 active loan officers and 75 branches, according to data from mortgage tech platform Modex. The company has licenses in 49 states. According to the Modex data, almost 80% of the company’s production is conforming and 55% is purchases.
The mortgage industry has been facing a wave of layoffs since late 2021. Surging rates are reducing lenders’ production, forcing them to cut costs, mainly staff hired to take advantage of the 2020 and 2021 refinancing boom.
So far, in the fourth quarter of 2022, companies such as Ohio-based Lower and Atlanta-based Angel Oak Home Loans confirmed they are cutting jobs. And industry experts believe there will be no relief in the coming months.
The Federal Reserve has increased the federal funds rate by 300 basis points so far this year to control surging inflation, resulting in a “reset” of the mortgage market. Another 125 basis points in hikes are still expected to come in 2022, with a federal funds rate topping out well above 4%.