Even the biggest mortgage players aren’t immune to the effects of higher rates and tight housing inventory. Rocket Companies, the parent of Rocket Mortgage and Amrock Title, said late Monday that it would be offering buyouts to 8% of its staff at its mortgage operations and title teams.
The company has roughly 26,000 employees, spread across its headquarters in Detroit and in Cleveland.
“One of our responsibilities as a company is to provide our team members a fulfilling career, and we have been able to do that for tens of thousands in the last 36 years,” Mike Malloy, chief administrative officer at Rocket Central, Rocket’s human resources arm, said in a statement Monday. “Over that time, we have been through several market cycles — similar to those the industry is experiencing today.
“As a result of today’s market, some team members have told us they are considering a move to another position or a completely different industry. At the same time, our career growth options in certain areas of Rocket Mortgage and Amrock are limited right now, while the housing market normalizes after two years of unprecedented volume.”
The voluntary buyout package includes several months of pay; full medical, dental and vision coverage until November; payment for banked personal time off; early vesting of stock that employees received at the company’s initial public offering in 2020, plus job training/resume building services.
Rocket, which is easily the largest mortgage lender in America, reported $6 billion in profits in 2021. That was a 35.4% decline from the unprecedented refi boom in 2020, even though mortgage origination volume actually rose to $351 billion, up nearly 10% from 2020. Like virtually every other mortgage lender, Rocket has seen origination volume and profit margins fall in recent quarters. Mortgage business slowed dramatically in the fourth quarter — Rocket’s net income fell 69.5% year over year to $865 million, which was also a sequential decline of 37%.
Rocket did not say if it would institute layoffs should the 2,000 or so workers selected for buyouts not agree to the packages.
The news of Rocket’s workforce reduction comes just days after Wells Fargo, the nation’s largest depository mortgage lender, announced that it would be cutting jobs at its home lending division. Sources told HousingWire that hundreds of mortgage processors and underwriters received pink slips.
Other job cuts over the last six months have come at Guaranteed Rate, which shuttered Stearns Lending‘s wholesale division; Freedom Mortgage, which shed jobs in South Carolina; Movement Mortgage, which laid off about 170 workers; Interfirst Mortgage, which has cut hundreds at its two locations; and perhaps most notably at Better.com, which has laid off about 5,000 workers since December.
Earlier this month, HousingWire published a deep dive exploring how various nonbank mortgage lenders are likely to fare in a purchase-heavy mortgage market. Several analysts and industry executives said Rocket and the other top players are likely to see compressed margins and greatly reduced profitability, but will ride out the storm and likely grab market share due to their largesse and cash positions.