Nonbank Mortgage Companies Cut 1,200 Employees in February

Payroll reductions by nonbank mortgage companies moderated in February, which could be a sign that the worst is over and loan production is beginning to stabilize.

The Bureau of Labor Statistics reported Friday that mortgage banking and brokerage firms cut 1,200 full-time employees in February after slashing their workforce by an upwardly revised 7,100 in the prior month.

Employment in the mortgage banking/broker sector fell to 283,700 in February, down just 8% from last July when it became clear the refinance boom was over.

The latest monthly reports from Fannie Mae and Freddie Mac show that GSE purchases of loans from lenders continued to fall in February. Freddie purchased just $17 billion in mortgages in February, down from $20.3 billion in the prior month, and down from $42.3 billion last July.

However, the number of single-family endorsements by the Federal Housing Administration edged up to 65,389 loans in February from 63,010 in January, according to the latest FHA data.

Friday's jobs report does indicate an uptick in residential construction activity. Single-family and multifamily builders hired 9,100 construction workers in March, after hiring 5,000 in February.

Overall, the U.S. economy created 192,000 jobs in March, compared to an upwardly revised 197,000 jobs in February, according to the Bureau Labor Statistics. The unemployment rate was unchanged at 6.7%.

(There is a one-month lag in the Bureau of Labor Statistics reporting of mortgage employment data.)

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