Newrez restructures retail operations, letting go of Caliber execs

Newrez, in what some call a surprise move, let go of a number of regional and divisional managers, which joined the mortgage shop as part of the Caliber Home Loans acquisition in 2021. The headcount reduction Wednesday may be a signal that the company is starting to divest from its retail operations and move its focus on servicing, a handful of industry stakeholders said.

Newrez declined to provide an estimate of how many leaders were impacted by the reduction and called it a "bit of a flattening of the organization."

An executive at the company Thursday said Newrez is "100% committed to the distributed retail channel." They also highlighted that "connecting our servicing portfolio and our servicing leads on a localized basis is really the differentiator on how we connect with our customers."

According to one industry stakeholder who requested anonymity, there were "two retail divisions and five regionals" left at what remained of Caliber. Following the layoffs, these managers are allegedly transitioning to OneTrust Home Loans and are urging their loan officers to do the same.

Newrez's servicing operations accounted for $365.5 million of net income in the third quarter, representing an increase from $285.8 million three months earlier and $215.9 million in third quarter 2022. Meanwhile, its originations business posted a third-quarter net loss of $9.4 million, falling further from $8.1 million in the second.

The headcount reduction comes at a time when other mortgage shops, such as Freedom Mortgage and others are starting to rehire, as the industry waits in anticipation of rates continuing to decline.

Paul Hindman, mortgage veteran, added that most mortgage companies are currently in the process of "breaking it to remake it." 

"Navigating economics, employment and emotion when 50% of the mortgage lending business was shut off in a six-month period was mostly a market event, but decisions must be made. Company culture is NOT created equal, and neither are the egos of executives or their decisions," he added.