Mortgage Lenders Cut Payrolls

Mortgage lenders dropped 6,500 full-time employees from their payrolls in December, and the correction in the subprime sector is starting to show up in the government's job figures.The U.S. Bureau of Labor Statistics reported that employment in the mortgage banking/broker sector declined from 501,200 in November to 494,700 in December. The BLS also revised downward the November and October job numbers, and the statistics now indicate that the industry cut 10,000 employees during the last two months of 2006. Industry economists have been expecting a retrenchment for some time, even though mortgage originations declined by only 7% in 2006 from the level of the previous year. A preliminary estimate by NMN's Quarterly Data Report shows that one- to four-family originations totaled $3.1 trillion last year, down from $3.3 trillion in 2005. However, home sales were down 10% last year, and the purchase mortgage business is more labor-intensive than refinancings. Housing economists are forecasting another 5% to 7% drop in originations in 2007. The Bureau of Labor Statistics can be found online at http://stats.bls.gov.