MortgageReverse

Layoffs strike again at Open Mortgage

Former employees took to social media to express surprise at the news, while the reverse mortgage division appears minimally impacted

Another round of layoffs has struck Austin, Texas-based multi-channel lender Open Mortgage, after a prior round was reported in June by RMD.

Open Mortgage Founder and CEO Scott Gordon confirmed for RMD that layoffs had taken place, but did not specify how many or what percentage of the workforce was impacted.

“In the traditional purchase mortgage channel, we are experiencing the same headwinds as every other lender nationwide — rising interest rates, record-low inventories, and inflation creating weaker demand,” Gordon told RMD in a statement. “As a result, we have made the difficult decision to reduce our operations and corporate staff to align with the lower traditional purchase volume expected this year. “

Scott Gordon, founder and CEO of Open Mortgage
Scott Gordon

Gordon did single out the company’s reverse mortgage channel for positive performance in 2022.

“We continue to be pleased with our reverse retail mortgage growth,” he said. “We began the year with a goal to double the retail reverse sales force, and we have already accomplished that goal. We will continue to add origination staff to the reverse business and welcome these new branches to the Open Mortgage team.”

The layoffs included people in the reverse mortgage division, though reverse mortgage layoffs appear to be isolated to junior-level employees including processors and underwriters according to people familiar with the matter.

A series of social media posts have been made by former employees indicating that the layoffs have hit the company in places including the underwriting and wholesale divisions as well as someone listed as a graphic designer, based on the roles of the former employees who described being let go this week online.

Being based in Texas, RMD reviewed the state’s Worker Adjustment and Retraining Notification (WARN) notice board but did not see Open Mortgage listed on its most recent revision. Texas only requires an employer to file a WARN notification if 500 or more full-time employees are impacted, or if anywhere from 50 to 499 full-time employees will be affected, so long as the number laid off makes up at least one-third (33%) of the employer’s active workforce.

After the June round of layoffs, Gordon explained for RMD that only a relatively small number of forward mortgage personnel were impacted by a reduction in force (RIF) instituted at the time, though the company’s recently-appointed president had also exited during that period.

Gordon also described the company’s reverse mortgage division as one of its positive differentiating factors when describing the previous round of layoffs.

“2022 isn’t a great year for any mortgage company just by the general nature of the market, but we feel like we’re pretty well-positioned,” Gordon told RMD in June. “It’s great to have traditional and reverse. I joke that it’s like having twins; they’re each their own individuals and we love them both. But aside from the macroeconomics that hurt margins for all mortgage companies, we feel pretty excited about where things are going and how it’s progressing. And I’m no less dedicated to reverse than I ever have been.”

At last count, the company was known to have between 400 and 500 employees.

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