The mortgage market has already seen some seismic shifts in the last several weeks, as lenders of all shapes and sizes made changes to their lending standards to deal with the current economic conditions in the U.S. Other lenders put certain lending programs on hold or paused lending altogether.
And now, one of the mortgage market’s biggest players is shutting down one of its lending channels, but it says the change isn’t due to the coronavirus.
According to the company, wholesale lending was a small part of its overall lending and it is shifting its focus to those larger channels.
“After careful consideration, Mr. Cooper has made the decision to cease its wholesale lending operations, a segment of the business we entered as part of the Pacific Union Financial acquisition,” the company said in a statement provided to HousingWire.
“The originations team has successfully grown Mr. Cooper into a top 15 lender, resulting from continued growth in both the Direct-to-Consumer and Correspondent channels. As the market has evolved, we’ve increased our focus on our current customers and continue to prioritize investments in their experience to create customers for life,” the company continued.
“Additionally, we will continue to make investments in growing our Correspondent channel. The wholesale platform accounted for less than 5% of our total originations volume, and we believe reallocating resources to other segments within originations will help us better meet the needs of our customers today,” the company added. “The pandemic was not the driving force behind this decision.”
Mr. Cooper is the third-largest mortgage servicer in the U.S, claiming that it services 6% of the overall mortgage market. But the company has a growing origination arm, including a program to acquire servicing customers and convince them to use Mr. Cooper as their lender for a refinance or a home purchase.
And now, the company will turn its attention to lending in that channel and others instead of wholesale.
According to the company, the shift will lead to a “small number” of layoffs, but the company did not disclose how many employees would be let go.
“We were able to find new roles within the company for the majority of our wholesale team members, shifting them mainly to our direct-to-consumer lending team,” the company said. “We regret that this has impacted a small number of team members especially during this uncertain time. We are working with those individuals to find new opportunities at other organizations, in addition to offering career outplacement services and severance packages.”