Credit Union Mortgage Jobs Being Cut

CUNA Mutual Group will spin off its mortgage business and in the process cut approximately 175 jobs — a majority of them in Wisconsin, according to an announcement Monday.

A signed letter of intent has reportedly been executed indicating CUNA Mutual Mortgage Corp. will be sold to PHH Mortgage for an undisclosed amount.

The move reportedly came after several months of strategically reviewing the mortgage division.

“The marketplace in which CUNA Mutual competes is changing dramatically,” said company President and Chief Executive Jeff Post in the announcement. “The number of credit unions is declining, and we face increasing global competition in the financial services arena. As we reviewed our mortgage business it became quite clear the additional investment required to deliver efficient, best-in-class services to our credit union customers and their members could not be justified.”

The mortgage unit reportedly services more than $10 billion in loans with credit unions nationwide and in the last 12 months has originated about $1 billion in mortgages, a majority being from wholesale and correspondent channels. Last year’s volume amounted $1.25 billion, according to an e-mailed statement from company spokesman Rick Uhlmann.

The pending sale will affect the 175 employees of CUNA Mutual Mortgage, of which 160 work in the Fitchburg, Wis.-based offices and the remainder working as “field” employees located around the country, according to the spokesman. The functions performed by the employees include, servicing, underwriting, closing/post closing, compliance, sales, marketing, training, and IT.

“PHH may retain only a few employees,” Uhlmann said.

The Fitchburg operation is likely to be phased out over the next several months as the mortgage business is transitioned to PHH — which is expected to occur as early as the end of this year following the agreement on the deal anticipated to take place within a couple of weeks, according to Uhlmann.

CUNA said it will maximize redeployment of displaced employees within the company.

While the Madison, Wis.-based organization said it is currently conducting reviews of other non-core business areas, it is retaining its San Francisco-based private mortgage insurance business, CMG Mortgage Insurance.