County mortgage lenders slash jobs/ As rates jump, activity slows

Gazette, The (Colorado Springs), Dec 13, 2003 by WAYNE HEILMAN

El Paso County mortgage lenders are shedding jobs after refinancing activity has slowed to a crawl and interest rates headed higher this fall.

Lending activity for many local mortgage operations has slowed as much as 60 percent since peaking in July, said Wayne Bland, president of Intermountain Mortgage Co. and first officer of the Southern Colorado chapter of the Colorado Mortgage Lenders Association.

"Everyone in the industry anticipated a slowdown when rates went up, but no one expected it to just quit like it did in September," Bland said. "This industry goes through cycles regularly, but this is the most dramatic I have seen in my 26 years in the business."

Bland said his company eliminated five support jobs, or 20 percent of the staff, Nov. 1 to cope with declining mortgage volume. Many lenders have cut temporary staff added to handle the staggering volume of mortgage refinancings this summer.

Wells Fargo & Co.'s Equity and Consumer Credit groups laid off 106 temporary and contract employees locally last month in part because higher rates have slowed home equity lending volume. The two groups market and process mortgage and home equity loans for Wells.

Countrywide Home Loans Inc. closed a wholesale lending operation in Colorado Springs last month, when it consolidated operations to Englewood. The California-based company moved seven workers from the office to Englewood and laid off five others.

Washington Mutual is cutting 2,900 jobs out of its mortgage operations nationwide by the end of the first quarter after eliminating 4,500 temporary and contract positions during the past three months. The company employs 45 in Colorado.

Refinancing activity boomed as rates in June hit 5.21 percent, the lowest in nearly 40 years. The El Paso County Public Trustee's Office said it has released 96,702 mortgages in the first 11 months of the year, mostly because they were refinanced.

The number of loans from the trustee's office in November fell nearly 40 percent from the record 13,558 released during October.

Although rates have moved above 6 percent several times since this summer, most local lenders still are offering mortgages at 5.75 percent.

The Mortgage Bankers Association said this week that refinance activity has declined more than 60 percent from its peak.

The Washington, D.C.-based group estimates mortgage lending will drop nearly in half from $3.36 trillion this year to $1.65 trillion next year.

The group estimates 65,000 jobs will be cut in the industry next year, similar to the cuts that came after the last refinancing boom in the mid-1990s. Mortgage industry employment peaked at 423,200 in July, up more than 150,000 in just 18 months.

"There were a lot of people who flooded into the industry during the first half of this year that left just as quickly as they came," said Robert "Hutch" Hutchison, Southern Colorado area manager for Vectra Mortgage in Colorado Springs.

Mortgage lenders have been forced to resume marketing their services to real estate agents and home buyers after spending most of the past two years having to do little more than "open the doors and answer the phones" to close loans, Hutchison said.

Warren Meacham, vice president of Auer Colorado Online Mortgage, said he expects some of the lenders who flocked to the Springs during the refinance boom won't survive this decline.

More than 100 mortgage lenders operate in El Paso County, he said.