Home Point cutting 113 Michigan employees after sale

Days after announcing the sale of its wholesale business to The Loan Store, Home Point Capital filed a Worker Adjustment and Retraining Notification Act notice in Michigan announcing the termination of 113 employees.

"The expected separations will begin on April 11, 2023," the letter dated that same day and sent to Jimelle Howard, manager at the Department of Labor and Economic Opportunity Workforce Development, said. "Employees do not have bumping rights."

This reduction is related to the transaction, the company confirmed. More positions are being eliminated nationwide.

However, Michigan is the only state where the company has a sufficient number of workers where it needed to file a WARN Act notice. Affected employees in all locations have been notified and apprised of their rights.

"Impacted associates are eligible for pay and benefits continuation under the WARN Act as well as an offer of severance, which is consistent with past layoffs," a statement from a Home Point spokesperson said.

In February, the company acknowledged it was doing layoffs, but did not specify how many people were being let go; estimates were for between 350 and 400.

Around the end of the first quarter, Home Point still had a little more than 500 employees.

As a part of the sale, approximately 100 are expected to or already transitioned to The Loan Store; that includes Phil Shoemaker, Homepoint's president of originations, who will become the buyer's CEO.

Homepoint will stop funding loans on May 31; the deadline for mortgage brokers to submit locks (or re-lock loans) has passed.

Remaining operations staffers are in place to help manage the remaining loans in its pipeline.

After the sale is completed, Home Point's remaining business will be to manage its own mortgage servicing rights. However, for the past year, the actual function has been outsourced to ServiceMac, a unit of First American Financial.

It expects to have a headcount of 50 to 60 employees going forward.

Capacity remains an issue in the mortgage industry. At the Mortgage Bankers Association annual convention in October 2022, Marina Walsh, its vice president of industry analysis, said employment needed to be cut by another 25% to 30%.

At that time, the latest data available from the Bureau of Labor Statistics from its August survey, estimated industry employment at 379,400.

By year-end it slipped to 353,300 and for January it was down to 350,200. Preliminary data for February pegs the number of workers in the mortgage industry at 343,500.

Based on Walsh's 30% comment, from the August figures, mortgage industry employment likely should come down to approximately 265,580.

More recently, Walsh commented that excessive size of the industry's workforce led to the $301 per loan originated loss for the full year of 2022.