Freedom Mortgage started letting people go last Thursday and the layoffs have carried over into this week, impacting close to a thousand employees, according to estimates from half a dozen employees. Those affected say this is the biggest reduction the company has made in years.
Sales, underwriting, closing, processing, IT, human resources and loss mitigation departments experienced reductions. The reason given for the scale down was "worsening market conditions," former employees say. The only group spared from the purge was the company's servicing department.
The estimated amount of employees cut ranges from 800 to 1,000 employees.
Freedom Mortgage did not respond to multiple requests for comment.
"We had a meeting with our direct leadership and they spoke about how it was very unfortunate and how they didn't like having to share sad news about us no longer being needed," a former HR employee said.
As of Wednesday, former Freedom employees let go last Thursday received communication from the lender that they would get two weeks severance pay. They were reportedly asked to sign an NDA agreement and return equipment prior to receiving severance.
Their health and dental benefits will expire at the end of the month, and accumulated PTO will not be paid out, employees impacted say.
A manager, laid off Wednesday, noted that the level of production "was just not there."
"Typically we're looking at 450 to 500 loans in just purchases [during the pandemic] and today there were only 100, so the writing was on the wall."
Layoffs have been torpedoing through the mortgage industry in the
The mortgage industry's recent bloodletting has left behind frazzled employees with no backup plan.
"All I see across my LinkedIn is I'm laid off today. I'm laid off today. I'm laid off today," the HR source said.
"I think that the mortgage industry as a whole doesn't have the best business model as it relates to taking care of people currently employed and those that may be subject to being reduced."
Former Freedom employees have expressed the desire to get out of the mortgage industry.
"I'm trying to get out of the industry as soon as possible," one manager impacted by layoffs said. "It doesn't look like the market is gonna turn around anytime soon."
Fitch Ratings in a recent peer
Specifically, Fitch cited concerns that Freedom's "corporate leverage will remain elevated over the medium term," given expectations for continued weakness in earnings performance and driven by a sharp decline in mortgage origination volume.
