Life After Real Estate Frenzy, No Mass Layoffs

Wednesday, February 22 2006 @ 08:16 pm UTC

Contributed by: jron

The decline, or stabilization, of activity may soon affect the market in another way and it's called downsizing. Entering 2006, the real estate market has been stabilizing, meaning that sales activity has slowed due largely to rising mortgage rates.

Despite these announcements, the San Diego County mortgage industry should not expect any massive layoffs this year. On a nationwide level, the industry has been experiencing reports of declining revenues from lending and some layoff announcements from various companies.

Dustin Hobbs, communications director for the California Mortgage Bankers' Association, said "We haven't seen rumblings within our organization that there'll be any massive layoffs (upcoming in California)."

Rob McNelis, past president and spokesman for the San Diego chapter of the California Association of Mortgage Brokers, said "There's definitely been layoffs in the area, but it's nothing new. ... It's an industry that has ebbs and flows,"

Evident by those leasing new office buildings, Mortgage companies within the county likely observe these future opportunities.

Mortgage companies leasing office space include Prado Mortgage with 4,000 square feet, Homebridge Mortgage Bankers with 3,254 square feet, and JPG Holdings with 2,918 square feet, since the beginning of the New Year.

Eliminating 2,500 jobs, nearly half of which are in California and Florida. The company said the cuts represent nearly 4 percent of its total workforce of 60,000, Recently Washington Mutual Bank, the third-largest mortgage lender in the country by total volume in 2004, announced it would close 10 of its 26 home-loan processing centers.

about 200 workers will lose jobs in Campbell, 100 will lose jobs in Stockton, and others will lose jobs in Chatsworth. Loan processing centers will remain in Irvine, San Diego, Sacramento and Pleasanton, where work volumes from the closed locations will be shifted. The job reductions also will be partially offset by new hiring at the remaining state locations, of those layoffs within California

The lender recently reported that mortgage revenues were down 47 percent in the fourth quarter from the third, In a statement, Washington Mutual said the move in part reflected its effort to better match its processing capacity to "current and anticipated mortgage market conditions."

Combined revenue of businesses other than home mortgage grew 7 percent from fourth quarter 2004 to fourth quarter 2005. Wells Fargo, the second largest residential mortgage lender, recently reported that revenue from its home mortgage division declined $178 million from $1.32 billion in fourth quarter 2004 to $1.15 billion in fourth quarter 2005.

By: Dijon Wainwright