Layoffs, again: Fairway is the latest lender to trim workforce

Fairway staff across the country received phone calls last week announcing they were part of a round of layoffs, and sources told HousingWire.

Fairway Independent Mortgage Corp. of Madison looks to be the latest mortgage lender to lay off employees due to the problematic origination market, demonstrating that rising mortgage rates and property prices are already hitting enterprises with a significant proportion of purchase loans in their portfolios.

 

A dozen former Fairway employees told HousingWire over the last several days that they got phone calls from their bosses last week informing them that they were part of a wave of layoffs.

There were, however, no WARN Notices located in the states where these individuals work.

A Fairway spokeswoman declined to comment, including on whether there were layoffs or the number of employees impacted. Fairway employs over 9,000 team members, including over 2,800 producers, according to its website. It operates over 750 branch and satellite sites in the United States.

Deciding entering the real estate market, there are lots of ongoing things. Before everything, you must boost your knowledge related to real estate. You should know about buying or selling a house, types of real estate such as commercial real estate, the home buying process, and the homebuying calculator. Finally, if you decided to put a step further by trying investing in real estate, you would better know about things like homebuyers tax credit and grants for buying a home, or even REITs. Moreover, in order to own a property, you need to pay its price, so you need tons of money which is more likely you don't have at the moment. Here, you need to get a loan from the mortgage company. As a guide, you can also hire a real estate agent during the process. Due to the current market situation, we are now going to focus on layoffs from one of the biggest lenders in the sector that recently trimmed the workforce. 

Hiring decisions are difficult to make, especially for real estate companies. Employers are frequently inundated with dozens, if not hundreds, of applications at any given moment. Mortgage rates are rising, home sales are declining, and some of the nation's major real estate firms are laying off employees. Earlier this spring, some mortgage companies curtailed previously extended activities in order to adjust to the massive amount of mortgages that have flooded the market over the last two years.

Madison-based Fairway Independent Mortgage Corp. appears to be the latest mortgage lender to cut jobs due to the challenging origination market, showing that surging mortgage rates and buying a home prices are now affecting companies with a high share of purchase loans in their portfolios. 

Fairway staff across the country received phone calls last week from their supervisors announcing they were part of a round of layoffs. A dozen former employees told HousingWire over the last few days. However, no WARN Notices were found in the states where these employees work. 

A spokesperson for Fairway would not provide any comment, including a comment on whether there were layoffs or the number of employees involved. According to its website, Fairway employs more than 9,000 team members, including over 2,800 producers and over 750 branch and satellite locations in the U.S. 

Six months ago, Fairway was more comfortable than its rivals: purchase loans accounted for almost 62% of the company's total origination in 2021, the highest share among the top 12 lenders in the U.S, according to Inside Mortgage Finance

At that point, lenders focused on originating refinance loans for buying a home, such as Better.com and Interfirst, announced workforce reductions as interest rates started to increase – higher rates usually reduce borrowers' incentives to refi their mortgages.

But this year, Fairway started to feel the consequences of mortgage rates at 5.25% and surging house prices. According to the Mortgage Bankers Association (MBA), these two factors weigh on purchase loans. Some buyers put the American dream of homeownership on standby. 

Consequently, Fairway's origination volume reached $12.6 billion from January to March, down 24% quarter over quarter and 33.5% year over year. Still, according to IMF data, the company was the 12th-largest mortgage lender in the country in the first quarter of 2022. 

Workforce reduction 

Fairway's workforce reduction included the wholesale and retail channels, from analyst to senior positions such as underwriting, training, and information technology. The layoffs included professionals with more than two years working for the company, as well as some that started there less than four months ago.  

The lender offered a two-week severance payment for some employees but no career transition support. Most of the employees reported the company locked up their computers on the same day they received the phone call.  

"I was given a call in the morning by my supervisor who said: 'I'm sorry, but you are included in a list of layoffs. And it has nothing to do with your performance. It is strictly a financial decision," said a former employee who prefers not to be identified.

Another former employee who prefers anonymity added: "We received about three hours' notice before our computers were locked up." 

The former employees created a group on LinkedIn to share their experiences and are organizing Zoom meetings every morning to support each other during the transition in their careers. HousingWire attended one meeting on Wednesday when ten professionals participated. 

"Our goal is to help people increase their network of connections, review their resumes, practice their interview techniques, and give emotional support," said a former employee who joined the group. 

Founded in 1996 by Steve Jacobson, Fairway has its corporate headquarters in Madison and a large office in the Dallas area – the latest is where the technology team, strongly affected by the workforce reduction, is located. 

However, over the last couple of years, the company hired people from anywhere in the country for remote work, according to former employees. Some of the laid-off professionals had never been to a physical corporate office, and they told HousingWire. They are from states such as Arizona, California, and Florida. 

Fairway received attention in March 2021 when United Wholesale Mortgage (UWM), the top wholesale lender in the nation, announced that it would no longer partner with brokers working with Rocket Mortgage or Fairway, which has divided the broker community into two camps.

In a highly competitive market, lender­s are cutting costs, mainly via layoffs. California-based Owning Corp., a direct-to-consumer lender acquired by Guaranteed Rate in February 2021, cut 108 jobs in three rounds from February to April. And it intends to add another 81 layoffs to the list. Other lenders also have reduced staff, such as Interfirst, Mr. Cooper, Union Home Mortgage, Flagstar, Wells Fargo, and Better. Rocket has not laid off workers but has offered a voluntary buyout to some of its staff. In the end, During this situation in the market, you can ask Realiff's experts about Real Estate to jump over the obstacles wisely!

The reduction in employment may be an indication that brokerages expect that the cooling of the U.S. real estate market has only just begun, putting an end to the period of record-low mortgage rates, bidding wars, and high prices that developed following the beginning of the pandemic. It is possible that it would be prudent to take note of the job losses and of the market turnaround; nevertheless, according to experts, it is unlikely that buyers and sellers would be hit as promptly or as significantly by the conditions that the agencies are bracing for. During this situation in the market ask Realiff's experts about Real Estate in order to have the best deal.