Mortgage banking and broker employment continues to buckle under the weight of a severely depressed originations market, the virtual evaporation of refinancings, and higher interest rates that have sent many lenders scurrying into a defensive posture.
The Bureau of Labor Statistics reported recently that employment in the mortgage banking/broker category fell to 228,600 in October.
This was on the heels of a decline to 234,800 in September, which was off from 240,900 in August.
"I think it's a trend that's going to be consistent," said Mark Springer, president of M.H. Springer & Associates, a mortgage industry executive search firm in Woodland Hills, Calif. "I suspect that that number will soon get down to around a couple of hundred thousand."
Such declines should be expected, he said, because of "adjustments" in the marketplace.
"Everyone's moving to rationalize the current level of mortgage production as well as seeking -- through technology and other ways -- additional savings and efficiencies," Mr. Springer said.
"On the one hand, there are people who can't make a living because of the decline in mortgage volume," said Allen Gutterman, president of Response Staffing Services, a professional-placement firm in New York. "Those people are moving out of the field.
On the other hand, he said, there has been a greater demand for employees who were successful in the marketplace as sales people prior to the refi boom.
"Those who have been in the industry less than three years are probably leaving."
The surge in demand for mortgage loans over the last three years created a correspondingly strong demand for mortgage professionals -- but expansion in employment was superficial in many respects, experts say.
"What took place as a result of the refi boom was the use of interim workers to fill gaps in employment demand," Mr. Gutterman said.
"The mortgage temporary was a very much in vogue career option for the industry professional during the last two years."
He said that businesses traditionally would overstaff dramatically to meet surges in volume.
"That no longer is the case, as evidenced by the diminished decline in the labor force-participation rate after the refi boom fell off because temporary workers are not part of the permanent labor force-participation rate in the industry," Mr. Gutterman said.
He said that the people who are in high demand and who are staying are those who have been in the industry a long time, have established books of business and relationships, and who essentially don't subject themselves to refinancing activity as their only source of income.
"Mortgage-origination volume is off 45% to 50%, but labor force-participation rates are nowhere near that number as far as declining," Mr. Gutterman emphasized.
Mortgage-origination volume, which reached $1.1 trillion in 1993, is expected to drop to about $700 billion this year and about $590 billion in 1995.
Indeed, the mortgage market appears to be adjusting to a more traditional market of $550 billion to $600 billion.
"The drop in employment within the mortgage industry is not being felt that greatly because a lot of commercial banks are getting very big into the business," Mr. Gutterman said.
On the Breadline: Jobs for Lenders Scarce
The job market in the mortgage business has collapsed
* Loan originations are seriously depressed
* The buildup over the last few years was superficial, with many temporary workers used
* Technology is continuing to make inroads and is reducing staffing requirements
On the positive side
* Big producers are having no trouble finding new jobs
* Expanded bank involvement in mortgages has taken up some slack