Joining other lenders in mortgage pullback, Chase Bank to cut 400 jobs
JPMorgan Chase is eliminating 400 positions in its mortgage banking unit, the latest lender to trim staff as a result of lower-than-expected demand in 2018.
The cutbacks were first reported in The Wall Street Journal.
“Our servicing portfolio is performing well, with delinquencies accounting for less than 2% of all loans, a 22% decline from last year," a Chase spokeswoman said. "When fewer people are struggling with their mortgages, and more people are using self-service channels, we can adjust staffing. Like all companies, we are making improvements to operate more efficiently and make slight adjustments to resources to best meet the needs of the market. "
The reduction involves less than 2% of the group's employees and no offices will be closed.
While total loan origination volume has shrunk as expected, the offset from increased purchase activity has not occurred. The housing market remains stagnant as the for-sale inventory shortages continue. Affordability is affected as interest rates and home prices continue to rise.
Wells Fargo eliminated 638 positions in August, citing the need to align its staffing with current mortgage origination volumes.
Movement cited mortgage industry economists reducing their 2019 loan origination projections in recent weeks as part of the catalyst for its decision to let go of 180 back-office employees effected Oct. 5.
Lender origination margins also are depressed; this year's second quarter was the lowest pretax production income for that three-month segment since the Mortgage Bankers Association started tracking this data in 2008. Lenders earned 21 basis points during that quarter, but that followed an 8-basis-point loss in the first quarter.
Nonbank mortgage employment rose in August as lenders were looking for an end-of-summer uptick in business, according to Bureau of Labor Statistics data released on Oct. 5.