LOs, senior managers among the 300+ cut in latest Caliber layoff

Caliber Home Loans, owned by publicly-traded Rithm Capital, issued pink slips to at least 300 employees earlier this week as soaring mortgage rates thin out already-declining origination volume. The lender has made at least four rounds of layoffs this year, multiple sources told HousingWire. 

An internal document viewed by HousingWire details which jobs were eliminated as part of the reduction in force on Tuesday. It shows that several management positions were eliminated, including assistant vice presidents of divisional operations and underwriting, as well as two AVPs of regional operations and four AVP underwriting positions. 

The most heavily impacted position was processors. At least 93 processors and 25 junior processors were affected, as well as 13 processing managers. At least 38 closer/funder positions were eliminated, five closing managers and 35 underwriters. 

“The official reason that was provided by the leadership was due to the unprecedented spike in interest rates and the drop in mortgage origination volume, they made the difficult decision to terminate the employment,” said a former employee who requested anonymity to speak about the cuts. 

Pink slips were issued to workers in the learning and development team, developers and support staffers in the IT department, as well as loan officers, multiple current and former employees told HousingWire.

Caliber did not respond to requests for comment. Employment termination was September 20 and severance payment depended on how long employees were with the lender, sources said. 

Mortgage loan originators, impacted by the layoff, still had loans in their pipelines and claimed they weren’t paid out as loans don’t get closed until the end of the month.

“I had loans in my pipeline but I’m guessing they have to transfer my loans to another loan officer,” said a loan officer who was let go in the most recent round of layoffs. 

“Even if you’re an experienced loan officer, and you didn’t start that file and have that first communication with the customer to truly understand their situation, that reduces the likelihood of loans closing dramatically,” he said.

As of early Friday afternoon, HousingWire was unable to confirm the number of LOs laid off. 

LinkedIn posts from employees in senior management indicated they were also affected. 

“In this unfortunate downturn in the mortgage market, my current company had another round of large layoffs in Operations and my position was affected,” Candice Thomas, vice president of direct to consumer underwriting, wrote in a post on LinkedIn. 

Steve Bovenzi, senior vice president of operations, also confirmed his layoff through a post on LinkedIn. “Apparently, the algorithm for cost savings selected my name (I knew we should have used a Supervised Learning algo),” Bovenzi said. “Every responsible lender is looking at their costs. We are in a tough market.”

Rithm Capital, formerly known as New Residential Investment, which officially acquired Caliber last year, posted a $3 million loss in the second quarter of 2022, largely due to a decline in residential mortgage originations. Its origination volume dropped 29% to $19.1 billion in the second quarter. 

NewRez/Caliber ranked sixth on the list of the country’s top mortgage lenders in 2022, originating a loan volume of $46 billion in the first six months of the year, according to Inside Mortgage Finance. 

In response to slim margins due to rising mortgage rates, lenders conducted multiple rounds of layoffs this year. HousingWire reported that NewRez laid off 386 in February, less than one year after Caliber’s acquisition, but several layoff rounds have ensued. 

Economists from the Mortgage Bankers Association (MBA) forecast that production employment would likely have to be scaled back by 24 to 31% if origination volume drops 65% from the peak in the fourth quarter of 2020 to the first quarter of 2023.

Flávia Furlan Nunes contributed reporting

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