Lower-than-expected single-family mortgage origination volume leads the bank to cut jobs and close offices
HomeStreet, the parent company of HomeStreet Bank, announced a restructuring of its mortgage banking segment that will eliminate 133 jobs by the end of the year.
The move comes as the company lowered its expectations for the segment’s single-family loan origination volume. As part of streamlining the segment’s leadership, two regional manager positions were eliminated. HomeStreet also modified certain compensation plans.
Under the restructure, staffing for the segment was reduced by 60 full-time equivalent employees, substantially all of which were completed in the third quarter. This reduction follows net voluntary attrition since the beginning of the second quarter that totaled 32 full-time equivalent employees as well as a reduction in force of 41 full-time equivalent employees during the second quarter. HomeStreet said the segment will have reduced full-time equivalent employees by 133 by the end of the fourth quarter.
Additionally, two lending offices have been closed, while three offices were consolidated into nearby offices. Leased spaces in three other offices were reduced. The company plans to close another lending office in the fourth quarter.
HomeStreet expects total annual pretax expense savings of $13.2 million related to the restructuring, including the reduction in force in the second quarter.
“The strong West Coast economies and local markets in which we operate are continuing to produce above-average job and population growth, which, in turn, has created an ongoing shortage of new and resale housing,” HomeStreet Chairman, President, and CEO Mark Mason said. “This housing shortage has led to year-to-date single-family mortgage loan origination volume at the bank approximately 20% lower than we had expected for the year at the beginning of 2017. These conditions have adversely impacted the profitability of our mortgage banking segment. We do not see a near-term market catalyst that would result in a meaningful improvement in production volumes, therefore we have taken steps to reduce our mortgage origination capacity and reduce our cost structure to promote the long-term health and profitability of this business segment.”
Related stories:
Rate uncertainty dampens Q3 real estate market outlook
Wells Fargo mortgage banking income sinks
The move comes as the company lowered its expectations for the segment’s single-family loan origination volume. As part of streamlining the segment’s leadership, two regional manager positions were eliminated. HomeStreet also modified certain compensation plans.
Under the restructure, staffing for the segment was reduced by 60 full-time equivalent employees, substantially all of which were completed in the third quarter. This reduction follows net voluntary attrition since the beginning of the second quarter that totaled 32 full-time equivalent employees as well as a reduction in force of 41 full-time equivalent employees during the second quarter. HomeStreet said the segment will have reduced full-time equivalent employees by 133 by the end of the fourth quarter.
Additionally, two lending offices have been closed, while three offices were consolidated into nearby offices. Leased spaces in three other offices were reduced. The company plans to close another lending office in the fourth quarter.
HomeStreet expects total annual pretax expense savings of $13.2 million related to the restructuring, including the reduction in force in the second quarter.
“The strong West Coast economies and local markets in which we operate are continuing to produce above-average job and population growth, which, in turn, has created an ongoing shortage of new and resale housing,” HomeStreet Chairman, President, and CEO Mark Mason said. “This housing shortage has led to year-to-date single-family mortgage loan origination volume at the bank approximately 20% lower than we had expected for the year at the beginning of 2017. These conditions have adversely impacted the profitability of our mortgage banking segment. We do not see a near-term market catalyst that would result in a meaningful improvement in production volumes, therefore we have taken steps to reduce our mortgage origination capacity and reduce our cost structure to promote the long-term health and profitability of this business segment.”
Related stories:
Rate uncertainty dampens Q3 real estate market outlook
Wells Fargo mortgage banking income sinks
