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NewRes LLC, a major mortgage lending and servicing company, is laying off about 500 employees in Colorado and Florida as parent company Risum Capital Corp. continues efforts to diversify its business at a tough time for lenders.
NewRes and Risum, global asset managers specializing in real estate, credit and financial services, declined to comment on the planned layoffs of 420 NewRes employees in Colorado and 53 employees in Florida.
However, the first layoffs were announced on May 2nd. Completed $720 million acquisition Specialized Loan Servicing (SLS) LLC and its parent company, Computershare Mortgage Services Inc.
SLS is a loan servicing company that specializes in collecting monthly mortgage payments from distressed borrowers, offering forbearance to homeowners who can’t make payments and foreclosing on others. Some of the employees that NewRes will be laying off will have similar job functions to those of Computershare Mortgage Services, which currently does business as SLS, and SLS employees. Shell Point.
Lisum completed another big deal in November: a $720 million acquisition. Sculptor Capital Management Co., Ltd.is a hedge fund that invests in fixed income, real estate and a “multi-strategy platform” with $32 billion in assets under management.
Fort Washington, Pennsylvania-based NuRes sponsors 733 mortgage lenders in 90 branches, down from 983 lenders in 155 branches in October. NMLS RecordsNewrez also partners with real estate brokerages on a number of mortgage joint ventures through its Newrez Ventures platform, formerly known as Shelter Mortgage Company.
Michael Nirenberg
NuRes has not commented on the job cuts, but Risum president, chairman and CEO Michael Nirenberg explained the thinking behind the SLS acquisition during an earnings call shortly after the deal closed. Announced October 2nd.
“Really, this is a services transaction and there’s very little on the origination side,” Nirenberg said during an earnings call on Oct. 27.
Through the SLS transaction, Lisum gained $149 billion in mortgage servicing business, the majority of which ($104 billion) were loans that SLS serviced as a third party. As of March 31, Lisum’s mortgage servicing portfolio totaled $857 billion, including $225 billion in loans that Lisum serviced as a third party for other lenders.
That puts Risum in the same league as loan-servicing giant Mister Cooper, which is growing its loan-servicing portfolio from $650 billion in 2021 to more than $1 trillion this year.
But Nirenberg said the SLS acquisition “isn’t about so-called scale” but about increasing Risum’s third-party servicing fees. Those fees, along with the opportunity to offer refinancing to homeowners that NewRes serves, should help boost revenue at a time when rising mortgage rates are making it harder to originate new loans.
“With regard to our mortgage companies, we remain focused on cost-reduction measures, particularly in our lending division,” Nirenberg said in October. “With mortgage rates at 8 percent, we expect our lending business to remain under extreme pressure.”
Mortgage rates have fallen somewhat from their peaks in October 2023. However, on May 2, SLS acquisition completes — Newrez notified the state labor department. Colorado and Florida The company announced plans to lay off 156 employees, including 103 in Colorado and 53 in Florida, effective July 1.
On June 3, NuRez filed another notice under the Worker Adjustment Retraining Notification (WARN) Act with Colorado state authorities, informing them of its planned layoffs. Number of employees: 317 They will be shipped from the company’s Greenwood Village facility starting Aug. 2.
The positions NuRes will eliminate in Colorado include asset managers, bankruptcy supervisors and support personnel, workout specialists, default support personnel, loss mitigation supervisors and valuation analysts – positions that overlap with SLS staffing.
In October, Nirenberg said the SLS acquisition “expands our capabilities in the special services area. Looking ahead, as we look at the global macroeconomic conditions, if the U.S. economy slows and there’s an increased need for special services, there’s no company better suited than NewRes to work with homeowners and consumers.”
[In 2020 SLS agreed to provide $1.275 million in relief to consumers and pay a $250,000 civil monetary penalty to settle allegations by the Consumer Financial Protection Bureau that it improperly foreclosed on some borrowers, without admitting or denying the allegations].
The last big acquisition also led to job cuts.
Lisum laid off about 500 employees during a $1.44 billion acquisition spree, but the company experienced even more dramatic growing pains in 2022 as rising mortgage rates curbed mortgage lending.
New Residential Investment Corp. (as the company was called at the time) acquired Caliber Home Loans and Genesis Capital in 2021 before changing its name to Rithm Capital in 2022.
The $1.675 billion acquisition of Caliber Home Loans was part of a strategy to expand the company’s lending, servicing and asset management capabilities, and included $141 billion in mortgage servicing rights. Most of Caliber’s loan officers were laid off after the acquisition closed.
Lisum cut more than 6,500 employees, mostly in its mortgage origination division, to cut costs in 2022. Lisum, which had 12,296 employees at the start of 2022, reduced its workforce by 53%, to 5,723 employees at the end of the year.
Caliber’s operations will be fully integrated into Newrez in the fourth quarter of 2023, with many of its former executives moving to Ohio-based Union Home Mortgage.
As of December 31, 2023, Rhythm reports The company has a total of 6,570 employees, of which 5,656 are employed in mortgage origination and servicing activities.
Rithm also operates a single-family home rental business through its subsidiary, Adoor LLC.
“Adore is well positioned to benefit from the current market environment by acquiring SFR properties at high cap rates through acquisition channels and vertically integrating property management capabilities,” Risum said in an April 30 announcement. Investor Presentation.
Last fall, Rhythm Announced We have entered into a strategic partnership with Darwin Homes Inc., a subsidiary of Pagaya Technologies, for our new property management platform, Adoor Property Management LLC.
Pagaya, led by former Caliber CEO Sanjiv Das Darwin Homes acquired The stock swap, which will be completed in January 2023 for a total consideration of $18 million, will see Darwin employees receive $12 million in cash and stock compensation.
A week after announcing the Darwin Homes deal, Pagaya said it would lay off 20% of its workforce. Year-end There are 712 workers on the payroll, of which 142 are full-time employees in Darwin.
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Email Matt Carter