Mortgage Hiring Rises Amid Plans to Improve Credit Access

Nonbank mortgage lenders added 3,800 new workers to their payrolls in November amid new proposals to offer low down payment conventional loans being announced.

The Bureau of Labor Statistics reported Friday that overall employment in the nonbank mortgage banking/broker sector rose to 293,200 in November, from 289,400 in October. It marks the seventh consecutive month that employment in the mortgage industry has increased — though these same lenders hired just 200 new employees in October as demand for mortgage loans remained sluggish.

This increase in hiring, however, does not seem to be in response to strong demand. The Federal Reserve Board, which keeps keen watch on the housing market recovery, has noticed some improvement in the availability of mortgage credit over the past few months. At the Fed's Dec. 17 Federal Open Market Committee meeting, participants noted that "measures of residential mortgage lending conditions were little changed" since October. And despite declines in mortgage rates, "refinancing activity was subdued."

Meanwhile, overall hiring remained strong in December. The BLS reported Friday that the U.S. economy created 252,000 jobs in December, compared to an upwardly revised 353,000 jobs in November. The unemployment fell to 5.6% from 5.8% in November. There is a one-month lag in the Bureau of Labor Statistics reporting of mortgage employment data.

BLS commissioner Erica Groshen said monthly job increases have averaged 289,000 over the past three months. She noted that construction firms hired 48,000 workers in December, which is "well above employment gains in prior months."

Specialty trade contractors hired 26,000 workers, with the increase "about equally split between residential and nonresidential contractors," the commissioner said.

This could be a sign that homebuilders are looking ahead to a better spring selling season. And they are hoping the new Fannie Mae and Freddie Mac 3% down payment loans will attract more buyers.

The Federal Housing Administration is also lowering its mortgage insurance premiums, which should make FHA single-family loans more affordable.