Lending startup Social Finance (SoFi) will slash 100 mortgage jobs, according to a person familiar with the matter.
The cuts equate to about 7% of SoFi’s staff, Bloomberg said, citing a source who asked not to be identified. SoFi has announced plans to radically expand its mortgage business next year. The cuts are part of a wholesale restructuring of that division, according to Bloomberg. As part of the restructuring, SoFi will shift away from direct underwriting of mortgage loans.
SoFi first entered the mortgage space in 2014. So far, it’s done about $3 billion in loan volume, according to Bloomberg. Under the new mortgage structure, SoFi will still get the customer to the pre-approval stage, but will not underwrite the loan, Bloomberg reported. While borrowers will deal with SoFi throughout the process, title, appraisal and closing will be done by a partner company. The strategy will allow SoFi to reduce the risk on its books, Bloomberg reported.
Employees have been informed of the staffing reductions that come with the restructuring, according to Bloomberg.
“These changes put us in a better position to help even more members by offering competitive rates and a smoother digital experience,” a company spokesperson told the news service.