Hiring for mortgage jobs ramps up as loans keep streaming in

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Job estimates for nonbank mortgage bankers and brokers rose again in the Bureau of Labor Statistics’ latest report.

There were roughly 318,000 people on industry payrolls in June, up nearly 1% from the previous month and almost 9% from a year ago, according to the bureau. The BLS also made a slight upward revision to May’s mortgage numbers to 315,000 from 314,300. In June of last year, there were 292,000 people on nonbank mortgage industry payrolls.

June’s hiring appears to reflect an ongoing need to adjust capacity to address rate-driven demand.

“I’d like to get back to a normal funding cycle. Additional personnel will help us do that,” said Stan Middleman, CEO at Freedom Mortgage, a national nonbank that announced a plan to hire 3,000 people last month.

Managing funding capacity in the mortgage industry can be tricky given that demand is heavily rate-dependent and difficult to predict, but there are ways to address that.

Freedom is working to assign some of the work that may be more temporary to subcontractors, and hiring staff to fill positions that support longer term needs.

“I understand that our business is interest-rate sensitive and we certainly are busier than we typically have been historically, but we’ve done a bunch of things to ensure we have more stability in our employment group,” said Middleman.

Lower levels of employment in the broader economy represent a hiring opportunity for the mortgage industry, said Middleman.

Freedom is looking to attract college graduates by offering them training that includes a management track. The company’s also tapping its referral network to find prospective employees who are experienced professionals.

Overall U.S. jobs, which are reported with less of a lag than mortgage industry estimates, were up by 1.8 million in July and the unemployment rate fell to 10.2%.

By comparison, total employment was up 4.8 million in June and there was an 11.1% unemployment rate in June.

Prior to the coronavirus outbreak in the United States, the unemployment rate was closer to 4%.

A misclassification error that understated unemployment rates between March and May has been minimized in the last two months, according to the BLS. That error, at the most, may have understated unemployment by 1%.

In a move somewhat akin to what was seen in overall job numbers, residential construction industry employment continued to increase in July — but the gains weren’t as strong as they were the previous month.

There were 24,000 people hired in this segment in July including specialty trade contractors.

“While a deceleration from last month’s report, job growth in this sector is a [welcomed] sign for an industry dealing with supply constraints,” Fannie Mae Chief Economist Doug Duncan said in a press statement.

Both bank and nonbank mortgage companies are watching housing supply closely in making their hiring decisions because a certain amount of availability is necessary to support purchase volumes.

Purchase loans tend to be less rate-dependent than the refinances that are booming now, so lenders like to be sure they can have some steady homebuyer business to fall back on in case the incentive to refinance wanes.

“The issue we’re watching now is inventory,” said Steve Kaminski, head of residential lending at TD Bank. “Construction was stalled a bit, but we’re starting to see some of that come back.”

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Employment data Nonbank Mortgage brokers Bureau of Labor Statistics Mortgage rates Freedom Mortgage TD Bank