Mortgage lenders including Rocket and Flagstar turn to takeovers and layoffs in a falling market

Amid a declining mortgage market, some of Metro Detroit’s largest lenders seek to reduce their workforce.

Two companies housed within Detroit-based Rocket Companies Inc. (NYSE: RKT) announced on Monday that they are offering buyouts to some of their approximately 17,000 employees, according to a company statement sent to Crain’s.

Additionally, Troy-based Flagstar Bancorp Inc. has resorted to layoffs in recent months and Ann Arbor-based Home Point Financial Inc. has made “strategic adjustments” over the past year, which led to job cuts and the transfer of employees to other companies.

A statement from Rocket on Monday reads in part: “Today, Rocket Mortgage and Amrock offered approximately 8% of its team members – primarily in the Rocket Mortgage operations team and various groups within ‘Amrock – the ability to voluntarily accept a Career Transition Incentive.’

According to the statement, the “incentive” includes:

  • A substantial remuneration of several months
  • Comprehensive medical, dental and vision coverage for six months
  • Payment of accumulated personal leave
  • Early vesting of equity incentives team members received during the company’s IPO
  • Outplacement services including individual career coaching, CV writing and job search assistance.

“One of our responsibilities as a company is to provide our team members with fulfilling careers, and we have been able to do this for tens of thousands of people over the past 36 years. During this period, we have gone through several market cycles – similar to those the industry is experiencing today,” Mike Malloy, chief administrative officer of Rocket Central, Rocket’s human resources arm, said in a statement.

A company spokesperson declined to provide the total number of targeted buyouts, the timeframe employees have to decide whether to leave voluntarily or whether layoffs could be a possibility in the future if too few people accept the offer.

Rocket Companies is the publicly traded umbrella organization for many financial services organizations within the sprawling empire controlled by Detroit billionaire Dan Gilbert.

Within that are Amrock — which provides title insurance, real estate appraisals and other real estate services functions — and Rocket Mortgage, the nation’s largest mortgage lender. The latter company holds about 8% of the overall mortgage market and closed just over $351 billion in loans last year, according to data from industry publication Inside Mortgage Finance.

The state-owned company reported a profit of $6.1 billion on revenue of $12.9 billion last year. That’s down from net income of $9.4 billion in 2020 on more than $15.7 billion in revenue. Despite declining profits, Rocket Companies returned more than $2 billion to shareholders.

Year-to-date, Rocket Companies’ stock price is down more than 36% and down nearly 60% from a year ago.

About Teresa G. Wilson

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