Layoffs grow in mortgage industry
Subprime lending market is no more, says former Countrywide executive
August 23, 2007
BY GRETA GUEST
FREE PRESS BUSINESS WRITER
Brian Jurvis of Hazel Park wasn't surprised when he was laid off late last week from Countrywide Financial Corp.'s subprime lending division.
He was among six employees laid off Aug. 16 at Countrywide's Full Spectrum Lending Division in Troy, he said. About 16 people worked there. He went back Tuesday and the office looked abandoned.
"There is no subprime market anymore," said Jurvis, 36. "I knew something was coming down."
Jurvis joined more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month -- more than half of them eliminated since Friday. With few exceptions, the cuts are the direct result of woes in the nation's housing market, especially in subprime mortgages created for borrowers with risky credit.
In Michigan, hundreds of jobs have been lost as subprime and wholesale operations have vanished, said Drew Sygit, a certified mortgage and equity planning specialist with the Lending Edge Team at Meadowbrook Mortgage in Bloomfield Hills.
Sygit notes that Franklin Mortgage Funding, a subprime lender in Southfield, laid off 120 people earlier this year, Aegis in Troy let 25 people go three weeks ago, American Home Mortgage laid off 25 employees at its Farmington Hills underwriting operation and Option One in Novi let 30 people go.
"I'm not aware of a subprime lender with offices in Michigan," Sygit said. "A lot of them will not lend in Michigan."
More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings Inc. closed its subprime mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap.
Tuesday night banking giant HSBC said it would close a main financing office and cut 600 jobs.
Since the start of the year, more than 40,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by the global outplacement firm Challenger, Gray & Christmas Inc.
Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.
It's an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when about 100,000 employees lost their jobs.
"It's far from over," said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. "The subprime lending collapse will continue to ripple through the financial sector."
For five years, the nation's housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people who had little experience.
Jurvis, an account executive at Countrywide, worked in the mortgage business a little more than two years after several years of building and installing elevators around Michigan. He now plans to go back to school to get his teaching certificate.
Subprime lending market is no more, says former Countrywide executive
August 23, 2007
BY GRETA GUEST
FREE PRESS BUSINESS WRITER
Brian Jurvis of Hazel Park wasn't surprised when he was laid off late last week from Countrywide Financial Corp.'s subprime lending division.
He was among six employees laid off Aug. 16 at Countrywide's Full Spectrum Lending Division in Troy, he said. About 16 people worked there. He went back Tuesday and the office looked abandoned.
"There is no subprime market anymore," said Jurvis, 36. "I knew something was coming down."
Jurvis joined more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month -- more than half of them eliminated since Friday. With few exceptions, the cuts are the direct result of woes in the nation's housing market, especially in subprime mortgages created for borrowers with risky credit.
In Michigan, hundreds of jobs have been lost as subprime and wholesale operations have vanished, said Drew Sygit, a certified mortgage and equity planning specialist with the Lending Edge Team at Meadowbrook Mortgage in Bloomfield Hills.
Sygit notes that Franklin Mortgage Funding, a subprime lender in Southfield, laid off 120 people earlier this year, Aegis in Troy let 25 people go three weeks ago, American Home Mortgage laid off 25 employees at its Farmington Hills underwriting operation and Option One in Novi let 30 people go.
"I'm not aware of a subprime lender with offices in Michigan," Sygit said. "A lot of them will not lend in Michigan."
More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings Inc. closed its subprime mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap.
Tuesday night banking giant HSBC said it would close a main financing office and cut 600 jobs.
Since the start of the year, more than 40,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by the global outplacement firm Challenger, Gray & Christmas Inc.
Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.
It's an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when about 100,000 employees lost their jobs.
"It's far from over," said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. "The subprime lending collapse will continue to ripple through the financial sector."
For five years, the nation's housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people who had little experience.
Jurvis, an account executive at Countrywide, worked in the mortgage business a little more than two years after several years of building and installing elevators around Michigan. He now plans to go back to school to get his teaching certificate.
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