David Stein, a co-founder of RFC who is the president of the retail branch division and general counsel, said the office had 10 loan originators and 10 to 12 operations employees. The originators worked in the consumer-direct channel. The operations staff handled loans in the retail and consumer-direct channels.
The office was relatively new, open just over one year. The company’s headquarters in Columbus has 250 employees, plus there are another 150 employees who work out of a center in Tampa, Fla.
Stein said the company is considering many of the same issues that other mortgage bankers are in the current environment, namely the drop-off in loan originations as rates have risen in recent months.
“We’ve seen a dip in volumes of 25% to 30% since May and we want to be able to budget and plan accordingly so that we will profitable, not just this month but into the future. So some downsizing did take place,” he explained.
He added that RFC brought in a locally based competitor into the office where it invited it to interview and hire the employees affected. “We wanted to try and minimize the result for those employees as much as we could,” he said.
So it has elected to focus on the two major bases in Columbus and Tampa and shut an office that was removed from its “long-time core.”
Separately, Daniel Jacobs, who had held the title of managing director, retail branching division and had been working out of Charlotte, left RFC this summer, Stein said.
Jacobs, who Stein said he admired and liked, wanted to see the retail division go in a different direction and “we agreed to part ways in early July. It is unrelated to what happened last week (the closing of the Charlotte operations center).”
Also in early July, RFC closed 15 branches, which Stein said the company felt were “strategically not viable in our model. Our model is we want to grow branches that are purchase-oriented, referral-based, that are not reliant on heavy marketing costs.”
The branches which were let go were either losing money or had the bulk of their business come from refinancings and likely not viable in a purchase market. Also the closed branches tended to be more reliant on paid marketing versus referral marketing. The company felt these branches would be a drain on resources.
Coincidentally, at the same time, there were a couple of branches it would have terminated anyway because “sometimes you see behavior you are not comfortable with,” he said. These moves are also unrelated to the closing of the Charlotte operations center, although one of the closed branches also happened to be in that city as well.
Stein repeated the point that the moves were done to help remain profitable in a business which will see lower origination volume for the foreseeable future.
It will look to move forward with plans to grow the retail division with suitable, purchase-centric branches.
In August, RFC started a core services division to work with real estate brokers and homebuilders.