JPMorgan Chase Fired Hundreds Of Mortgage Employees As Interest Rates Skyrocket And Demand Drops
JPMorgan Chase fired hundreds employees from its mortgage lending business this week. The company says rising interest rates and a looming recession have lowered demand.
JPMorgan Chase did not confirm how many employees were let go or moved to different divisions.
Bloomberg says about 1,000 workers were affected. The outlet also stated that half the employees were let go. It also stated the other half were moving to different divisions within the bank.
The layoffs come two months after competitor Wells Fargo cut jobs in its home lending business. This also included hundreds of mortgage processors.
Most nonbank lenders conducted at least one round of workforce reductions this year as mortgage rates surged past the 5% mark.
Industry experts expected the layoffs after the Fed raised rates to the highest point since 1994. As a result, mortgage rates jumped to 6% last week.
At JPMorgan, the fifth-biggest mortgage lender in the country, the mortgage business shrank in the first quarter.
Origination volume dropped 41% from the previous quarter. Volume totaled $24.7 billion from January to March. Volume is also down 37% in comparison with the first quarter of 2021.
Home lending dropped 20% from a year ago with net revenue only reaching $1.2 billion in the first quarter. However, compared to the fourth quarter of 2021, it increased 8%.
CEO Jamie Dimon told analysts that he expected some difficult days ahead due to inflation and the war in Ukraine:
Those are storm clouds on the horizon that may disappear; they may not. That’s a fact.
Dimon also added that there is a bright side. He said customers still have $2 trillion in their savings and checking accounts. Businesses are also in good shape. Additionally, home prices are up, and credit is extraordinarily good.
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