House equity

Santander will start laying off its mortgage employees

Pink slips will start arriving for Santander Bankemployees working in the mortgage and home equity sectors following the bank’s announcement to stop making such loans in the United States.

In Pennsylvania, the company announced 53 permanent layoffs with an effective date of April 8, according to a Worker Adjustment Retraining Notification (WARN) sent to the state Department of Labor and Industry. .

This seems to be just the beginning.

HousingWire has learned that the bank’s exit from the residential mortgage business in the United States will result in the layoff of more employees, which a source with knowledge of the decision said would not exceed 5% of the bank’s workforce. in the USA.

According to its website, Santander US has 17,200 employees serving 5.2 million customers in the United States. Santander Bank, NA., retail and commercial businesses, has approximately 9,000 employees.

Santander Bank, which has long played a small role in the residential mortgage business, announced on Wednesday that it would stop originating residential mortgages and equity in the United States. The bank will review applications through its EZApply portal until February 11. The decision will not impact the commercial mortgage sector.

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According to the bank, it is adopting a strategy of unlocking capital to fuel growth and deliver more sustainable returns. “We continue to focus on investing in products that scale and leverage our core strengths,” the bank said in a statement to HousingWire.

Inside Mortgage Finance reported that Santander’s residential output was $2.7 billion in 2020, but there are no numbers for 2021. In the US, Santander Bank recorded $2.3 billion. underlying profit attributable to the parent company in Spain in 2021, up 230% compared to the previous year.

Santander’s mortgage division is the first casualty as the landscape shifts away from historic volumes of mortgage origination and record-breaking refinance activity.

Originations are expected to decline 33% year-over-year to $2.59 trillion in 2022, according to the Mortgage Bankers Association (MBA). The reasons are higher prices, lower volumes and fiercer competition.

Mortgage lenders are proactively reinforcing vulnerabilities and building on strengths. LoanDeposit manages more loans internally, Rocket expands its business through acquisitions, Attachment point reorganized its structure to contain costs, and Guaranteed rate focuses on profitable channels, leaving the wholesale channel.