California-based Owning Corp., a direct-to-consumer mortgage lender acquired by Guaranteed Rate in February 2021, is planning a workforce reduction amid higher mortgage rates and lower refinance volumes.
According to a Worker Adjustment and Retraining Notification (WARN) notice submitted to the Employment Development Department (EDD) in California, the company cut 108 jobs in three rounds from February to April but intends to add 81 to the list.
“A total of 189 individuals have and will be impacted,” wrote Tammy Jetton, executive vice president of human resources at Guaranteed Rate, in a letter to EDD on April 18 reviewed by HousingWire. Affected employees will receive 60 days of equivalent pay and benefits.
The layoffs affect mainly mortgage consultants, specialists, and assistants, but it targets underwriting and closing professionals. The list includes top executives, such as lending directors and vice presidents for credit and underwriting.
HousingWire sent a message seeking comment to Guaranteed Rate, which was not returned.
Founded in 2001 in Chicago, Guaranteed Rate picked up Owning to further accelerate expansion in the direct-to-consumer segment, said the lender’s president and CEO Victor Ciardelli during the deal announcement.
Owning’s platform processed more than $20 billion in total loan volume in 2020. It specializes in low-rate mortgage refinances, in which it originates a loan with no closing costs, including appraisal, credit report, escrow and title.
Guaranteed Rate is ranked No. 7 among the biggest lenders in the U.S., according to Inside Mortgage Finance (IMF). The lender’s origination volume reached $17 billion in the first quarter of 2022, down 25.8% quarter over quarter and 48% year over year.
Surging mortgage rates are reducing margins and volumes. In this context, Owning is the second company acquired by Guaranteed Rate in 2021 to face layoffs in the challenging mortgage market this year.
Early in January, Texas-based Stearns Lending, acquired in January 2021 from the financial giant Blackstone Group for an undisclosed sum, laid off 348 workers following the decision by Guaranteed Rate to discontinue operations of its third-party wholesale channel.
Stearns, founded in 1989, had a sizable partnership business, led by Steve Stein, a more limited retail operation, and a wholesale channel that was the largest in the industry as recently as 2013 but has lost market share to UWM.
But Guaranteed Rate now has a “laser focus” on leveraging its purchase platform augmented by the lender’s top officers, said Ciaderlli in an email to brokers announcing the closing of Stearns.
He added that to ensure success, the company “sometimes makes hard decisions,” according to the email reviewed by HousingWire.
Guaranteed Rate is just the latest lender to face layoffs, following others such as Interfirst, Mr. Cooper, Union Home Mortgage, Flagstar, Wells Fargo and Better. Rocket has not laid off workers but has offered a voluntary buyout to some of its staff.