Keller Mortgage eliminates some operations positions

Lender will issue pink slips for impacted employees on May 27

Keller Mortgage, part of the kwx holding company, laid off operations positions in a conference call on Monday May 23, according to more than a dozen employees. Pink slips will arrive for affected employees on May 27 and no later than June 1.

The layoffs included closing managers, underwriter managers, processors, post closers, funders, and pipeline management positions who were in the retail channel, employees that were notified of their layoffs told HousingWire.

“A bunch of us were given a 30-minute heads up for a mandatory meeting via zoom or via conference call,” said an employee who requested anonymity.

Employees who were affected by the latest workforce reduction were those working remotely and in the Ohio headquarters including professionals with less than three years of experience to more than 20 years in the mortgage industry.

“After the restructuring, only 10 pods (teams) were left from about 48 to 50 pods,” said another employee who preferred not to be identified. Each pod has about 15 employees consisting of loan officers, processors, closers, underwriters, supervisors, and funders, according to multiple employees. HousingWire was not able to verify the number of people who were part of the layoffs.

“In light of current market conditions, we have restructured the operations and support groups within our Keller Mortgage business,” Darryl Frost, spokesperson at Keller Williams, told HousingWire, without providing details on the workforce reduction, including the number of employees affected. “We remain committed to assisting our impacted employees and to growing our mortgage offerings over the long term.”

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Loan officers, who are 100% commission based at Keller Mortgage, were not part of the layoffs, according to multiple employees. “There is no cost for the company to keep them. The affected people were those on a salary,” said a supervisor who prefers anonymity. 

No Worker Adjustment and Retraining Notification (WARN) notices were found in the states where employees worked. In May 2021, Keller Mortgage reached 1,000 employees, doubling its size of 530 employees since June 2020, according to a Keller Mortgage talent acquisition specialist on LinkedIn.

The Mortgage Bankers Association expects loan origination volume to drop more than 35% to about $2.5 trillion this year. Lenders are directly hit by the changing housing market, which was the reason given for the restructuring, multiple employees told HousingWire. 

“About two weeks ago, all the underwriters were given an income calculation test of about 10 questions,” said an employee who spoke anonymously. “Rumor email was going around saying they were going to fire the ones who didn’t pass the test. But the director of underwriting reassured underwriters that they were assessing what kind of training was needed.”

Following a call on Monday that didn’t allow employees to ask questions, the firm sent an email that night notifying them that they would be receiving a “personal separation agreement on May 27 but no later than June 1,” addressed by the Keller Mortgage HR team in an internal company email obtained by HousingWire. 

The Ohio-based lender offered a four-week severance payment, a payout of unused paid time off of up to 80 hours, and benefits through the end of the month. No overtime is permitted between May 23 and May 27. 

Keller Mortgage, the lending arm of what it calls “the nation’s largest real estate franchisor by agent count,” laid off 150 employees with junior roles in October 2021. Keller Mortgage, like other lenders, staffed up to handle the refi boom in 2020 but faced challenges as interest rates started rising and refi business dried up. 

About 66.7% of the $4.16 billion originated by Keller Mortgage in 2021 was from purchase transactions, according to Home Mortgage Disclosure Act data by iEmergent. In 2020, the lender originated $5.63 billion with 69% of the volume being purchase loans.

With the mortgage industry expected to shrink more than 35% this year from 2021, lenders are adjusting to the market by cutting costs, including laying off employees.

Lenders are filing additional workforce reduction notices following their initial layoff announcements. Pennymac will lay off an additional 207 employees in June and July after it issued pink slips to more than 230 employees in May. After Interfirst eliminated more than 350 non-commissioned loan officers in November 2021, the firm laid off 140 additional employees in May. 

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