Booming market for mortgage workers

Job seekers crowd into a hotel ballroom to meet with employers during a recent job fair in Concord, Calif., geared towards unemployed construction, real estate, and mortgage workers. With interest rates at record lows, mortgage lenders are hiring. (Justin Sullivan/Getty Images)

It's so 2005.

Even as the rest of the US job market plumbs new depths, hiring by mortgage lenders is surging now that home loan rates have hit multidecade lows.

Employers have ruthlessly slashed jobs, and unemployment is at its highest in almost 16 years. But at least one sector is breaking from the trend - the mortgage banking industry.

Mortgage rates have plunged by nearly 1 percentage point since late November, spurring the kind of demand for home loan refinancing not seen since earlier this decade.

To cope, mortgage bankers have been hiring, a stark contrast to the last two years when the worst housing downturn since the Great Depression forced lenders into bankruptcy, mergers, and mass layoffs.

"With the big jump in applications some firms are adding employees, while others are rehiring staff that they previously laid off," said Jay Brinkmann, chief economist at the Mortgage Bankers Association.

"Others are postponing layoffs until they get a better sense of where business is headed," he said.

Bob Walters, chief economist at Quicken Loans, an online mortgage lender in Livonia, Mich., said they have added more than 100 loan officers to their 1,200- to 1,300-person mortgage banker workforce over the past month.

Rates on 30-year mortgages dropped to a low of 5.01 percent last week, the lowest since 1971, according to home funding company Freddie Mac, and business is indeed booming.

The Mortgage Bankers Association, in its latest survey, said its index of mortgage applications, which includes both purchase and refinance loans, has nearly tripled from where it was just nine weeks before and was a whopping 62.0 percent above its year-ago level.

"The US economy is going through a lot of pain, but this is certainly a silver lining," Walters said.

It is also a rare bit of good news for the hard-hit US housing market. Demand so far, however, has overwhelmingly been for loans to refinance rather than loans to purchase a home.

The MBA's purchase index is 16.9 percent below its level of a year ago, while the group's refinancing applications index reached its highest since early July 2003 in recent weeks and is 136.7 percent above a year ago.

"It is simple supply and demand economics that is driving our hiring process," said Leif Thomsen, chief executive of Mortgage Master in Walpole, Mass.

Volume at Mortgage Master is up more than seven-fold in the past 60 days alone. They have been processing 25 to 30 loans per day at about $9 million to $10 million per day, and now it is over $70 million per day. Refinancing is now 90 percent of business when it is usually 50 to 60 percent, he said.

Thomsen said they look to hire 200 people in the next year, so with a current workforce of approximately 350 employees nationwide, this would be growth of almost 55 percent.

"These are historically low rates and people are looking to take advantage of them, so we need to hire to support the business," he said.