California-based Pennymac Financial Services will lay off more than two hundred employees in the coming months, according to notices sent to the state’s Employment Development Department on March 7.
Pink slips will arrive for 236 employees at six different offices in five California cities, with the expected date of separation on May 6, the Worker Adjustment Retraining Notifications show. According to the company, bumping rights do not exist for these positions, and a union does not represent employees.
In January, the company said it had 2 million customers and over 7,000 employees in 16 locations. Pennymac did not respond to a request for a comment.
Two offices in Westlake Village will have a reduction of 96 jobs. Most of the positions to be eliminated are home loan specialists, including those with expertise in refinancing. But the company will also reduce top management jobs, such as VPs for risk and project management.
In Roseville, where the company has a consumer-direct business and information technology organization, Pennymac will eliminate 81 positions. These layoffs were first reported in the Sacramento Business Journal.
The company will also lay off 24 employees in Pasadena, 19 in Agoura Hills, and 16 in Moorpark.
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With refinance volumes anticipated to decrease by 62% this year and many originators experiencing layoffs, lenders are looking for a way to diversify their offerings with non-QM products and gain new business in order to maintain profits.
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Pennymac has said it is making an effort to boost its consumer direct lending business. In January, the company announced it would invest $3.9 million to open a new mortgage origination center in Franklin, Tennessee, creating 325 jobs in Williamson County.
Doug Jones, president and chief mortgage banking officer at Pennymac, said at the time the new facility would boost Pennymac’s operations coast-to-coast “while supporting the organization’s overall growth initiatives.”
The company estimates its market share in the consumer direct channel was 1.4% in 2021, compared to 2.3% in the broker channel and 16.8% in correspondent production, where it is the market leader. In loan service, it is at 4.1% of the market.
Last year, Pennymac Financial Services posted record loan production but had a significant decline in net profits, as other top publicly traded originators saw their profits shrink, too.
The nonbank reported a record $234.5 billion in unpaid principal balance in 2021, up 19% from 2020, its latest earnings report showed. The company reported a net income of $1 billion in 2021, down from its high of $1.6 billion the previous year.