Slowing mortgage production is behind HomeStreet Inc.’s decision to eliminate dozens of jobs and scale back on several home-lending centers.
In a statement Monday, the Seattle-based financial institution revealed that its expectations for single-family loans originations have been reduced.
Lower production is being blamed on strong job growth in the West Coast markets where it operates that has driven up demand for residential housing.
“The strong West Coast economies and local markets in which we operate are continuing to produce above-average job and population growth, which, in turn, has created an ongoing shortage of new and resale housing,” HomeStreet Chairman, President, and Chief Executive Officer Mark K. Mason said in the statement. “This housing shortage has led to year-to-date single family mortgage loan origination volume at the bank approximately 20 percent lower than we had expected for the year at the beginning of 2017.”
HomeStreet previously reported $3.6 billion in first-half 2017 mortgage originations.
Mason says it is unlikely home lending will significantly improve in the near term.
So HomeStreet said it reduced its staffing by 60 full-time equivalent employees mostly during the third quarter. It was the second workforce reduction this year for its mortgage banking unit; HomeStreet reported in its second-quarter earnings that it reduced its mortgage headcount by 71 employees during the three-month period. By the end of this year, 133 mortgage layoffs are expected to have occurred.
Also planned are closures, consolidations and space reductions that will impact nine single-family lender centers. Eight of the restructurings already took place in the third quarter, and the other one is expected to occur in the fourth quarter.
In addition, HomeStreet said it is streamlining
the single-family lending senior leadership team structure. This resulted in the elimination of two regional managers.
“Our mortgage banking segment remains an important part of HomeStreet’s heritage and business going forward,” Mason added. “Our retail focus, broad product mix and competitive pricing continue to attract some of the best retail originators in our markets and reinforce our position as a market-leading mortgage originator and servicer. We believe that these restructuring steps will align our cost structure with our current production opportunities and return the profitability of the mortgage banking segment to the levels that we expect.”
