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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (14791)	11/1/2003 2:56:31 PM
From: kumar	Respond to of 793670

Cuts in mortgage staffing begin BY SHERYL JEAN Pioneer Press Job cuts related to the crash of the once-surging mortgage refinancing business have started in the Twin Cities and across the country. As interest rates have climbed and mortgages have dried up heading into the traditionally slow winter season, the nonstop phone calls and 16-hour days have come to a halt for many home lenders and brokers. Banks and mortgage companies report that loan refinancing applications are down 50 percent to 80 percent from a few months ago. They no longer need the workers hired in the past few years to help with the refinancing boom. "All people in the industry, including our company, will lose at least 50 percent of their loan officers if it stays like this or gets worse in the next year," said Mark Harritt, a mortgage loan officer for U.S. Bank in Bloomington. "There won't be enough business for everybody." Some companies already have pulled back their employment, mainly of temporary workers. Others still are reviewing their options. Seattle-based Washington Mutual Inc., the nation's largest savings bank, on Friday said it may cut the equivalent of 4,000 full-time home loan jobs of 22,000 nationwide. Closer to home, Wells Fargo Home and Consumer Finance Group said Friday in a statement that it released an unspecified number of temporary and contract workers in Minnesota and other states "to reflect the pace of the market and our current application volume." The company did not have the number of reductions or decline in mortgage volume, a spokeswoman said. TCF Mortgage Corp. two weeks ago let go all of its temporary workers, a dozen employees and two contract loan underwriters in Minnesota and Michigan, said Doug Dinn-dorf, executive vice president of operations for the Minneapolis-based unit of TCF Bank. He declined to estimate the number of temporary workers. Summit Mortgage, based in Minnetonka, stopped using about 20 temporary workers and 20 college students at the end of August, after closing most of the refinancings from the boom, said owner Bob Carter. Its refinancing business has declined by about 50 percent, he said. "I think it's the norm. That's the kind of business we're in: It's very cyclical. We don't relish letting people go," TCF's Dinndorf said. Summit and TCF added temporary workers during the busy times so they could avoid layoffs when business slowed, officials said. TCF Mortgage's loan mix today is 70 percent purchase loans and 35 percent refinancings compared with 65 percent refinancings and 35 percent purchases earlier this year. Sung Won Sohn, Minneapolis-based chief economist for Wells Fargo & Co., isn't concerned that mortgage industry job cuts will derail the U.S. economy. "Clearly, housing- and auto-related jobs will be cut but the rest of the economy is growing, and I expect manufacturing and services jobs to increase," Sohn said. The U.S. economy recently grew at its fastest pace in nearly two decades, with the gross domestic product up 7.2 percent in the July to September quarter. The interest rate for a 30-year mortgage was 5.75 percent on Friday and rates topped 6 percent in August. Banks and mortgage companies must shift their focus away from loan refinancings as they look ahead. Minnesota Mortgage Financial Corp., a broker in St Paul, plans to go back to doing more sub-prime lending, said co-owner Steve Gaertner. Summit Mortgage's Carter said his 33-office business will focus on servicing the mortgages it sells to third parties and expand by adding more branches. -------------------------------------------------------------------------------- Sheryl Jean covers financial services and can be reached at sjean@pioneerpress.com or 651-228-5576.