Even though refinances have dropped off, mortgage lenders have not begun trimming down boom-sized staffs - yet.

"Institutions are not downsizing because we need people to clean up the mess," said Allen Gutterman, president of Response Professional Placement in New York.

The two-month-plus slide in the Mortgage Bankers Association's refinance applications index has not precipitated staff cutbacks at any level, say lenders and employee-placement consultants. Relatively high production volume is still pushing lending staffs to work to their limit.

And consultants say that even if lenders begin scaling back, pipelines won't empty out for three to four months.

In fact, from the northeast to Dallas to California - areas rebounding from more severe recession - lenders are still in "hot competition" for employees, said Mark H. Springer, owner of M. H. Springer and Assoc., a Woodland Hills, Calif. executive-search company.

Response Professional Placement, in New York, is now trying to fill 50 job openings, said Mr. Gutterman. He said the demand has created bidding wars that are pushing salaries up 10% to 15% "with no questions asked, just to get people."

"It's taking from Peter to give to Paul," he said. "It's just one big cycle."

Nevertheless, the cycle has entered the "end-of-the-party" stage, as one lender called it.

Richard C. West. senior vice president at Union Bank in San Diego, Calif., blames the application drop-off on the holiday season. Union is operating at full capacity and "We are a good 60 days away from reducing our temporary work force," Mr. West said.

Lenders and consultants said temporary workers have made staffs quicker to respond to changes in the market.

"It is an expensive quick-fix, but it's effective," said Mr. Gutterman, who said Response has been operating entire departments for companies that had sudden bursts in business.

But the dip in refi applications has had some impact. Brian Digan, director of sales and marketing at Mortgage Bankers' Consultants, an employment firm in Dallas, said the still-strong demand for processors and due-diligence teams shows "a slight trend" of lenders focusing on boning up their servicing business.

Nevertheless, Mr. Digan said, employment patterns in the lending industry are static.

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