Low rates have lenders such as Bank of America and Wells Fargo hustling and growing to keep up with an increase in business
As the refi boom continues into the second half of 2019, lenders are having to switch their tactics to keep up.
When interest rates began to rise last year, banks began the process of eliminating thousands of jobs and belt-tightening left and right. Now, they’re boosting their numbers in order to keep up with the sheer volume of mortgage applications flowing in thanks to lower rates. The mortgage industry has added almost 5,000 employees since March, a 1.5% gain, according to the Bureau of Labor Statistics.
Wells Fargo & Co., the biggest mortgage lender in the country, has increased staffing for its mortgage business by about 10% in 2019, and plans to keep hiring. Bank of America Corp. is also adding to its roster, hiring in a number of areas, including sales, processing, and underwriting.
The mortgage industry began shrinking in 2006, going from more than 500,000 employed mortgage professionals to just 318,600 in 2016. Now, however, it’s on the rise again. In June, numbers were around 323,000 mortgage professionals. The projected percent change in loan officer employment from 2016 to 2026 is 11%, while the average growth rate for all occupations is 7%, according to the Bureau of Labor Statistics.
The growth in hiring is directly related to the volume of refinancing mortgage applications, which the Mortgage Bankers Association indicates has tripled since December 2018. Banks are keeping that in mind as they hire, building as steadily as they can while keeping pace, but also investing in systems to make current employees more efficient and deal with their current file load.
Quicken Loans CEO Jay Farner told Bloomberg that he’s seen heightened competition in hiring lenders and underwriters in recent months, but they’ve been focusing on the technology investments all year, even before rates dropped and refi activity really picked up steam.
“It’s real tough on your business to always be hiring and removing,” Farner said. “We’ve been on this hiring climb to continue to build out the technology that our clients are looking for.”
Originators in all channels are thrilled to have the problem of “too much business” but even with more staff, some banks are struggling with the volume. At Wells Fargo, for example, refinancings are taking about 10 days longer than they were one year ago. The labor market might be tighter than it has been in previous refi booms, but Jerald Banwart, the bank’s head of retail fulfillment told Bloomberg that there’s still a lot of talent out there, and they plan to continue growing in the areas of processing, underwriting, and closing in the ballpark of an additional 5%.
Data from the National Association of Realtors (NAR) showed contract signings to purchase previously owned U.S. homes fell in July by the most since early 2018, indicating a pause in buyer interest. The index of pending home sales decreased 2.5% from the previous month.
