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Mortgage Job Losses Surpass 40,000
Wednesday August 22, 9:18 pm ET
By Ieva M. Augstums, AP Business WriterAs Mortgage Industry Retrenches, Industry Job Cuts Surpass 40,000CHARLOTTE, N.C. (AP) -- At the NorthCarolina offices of mortgage lender HomeBanc Corp., Archie Clark is theonly employee left. But in a few days, he'll be gone, too. When Clarkfinishes helping movers from the company's Atlanta headquarters collectcomputers and other property, he'll join the more than 25,000 workersnationwide who have lost jobs in the financial services industry sincethe beginning of the month -- with more than half coming since lastFriday.

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With few exceptions, the cuts are the direct result of woes in the nation's housing market.

Morelayoffs are announced daily. On Wednesday, Lehman Brothers HoldingsInc. closed its "subprime" mortgage business, laying off 1,200 workersat 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co.closed its wholesale mortgage unit and cut 541 jobs, and AccreditedHome Lenders Holding Co. added 1,600 positions to the heap. The nightbefore, banking giant HSBC said it would close a main financing officeand cut 600 jobs.

Since the start of the year, more than 40,000workers have lost their jobs at mortgage lending institutions,according to recent company layoff announcements and data complied byglobal outplacement firm Challenger, Gray & Christmas Inc.Meanwhile, construction companies have announced nearly 20,000 job cutsthis year, while the National Association of Realtors expectsmembership rolls to decline this year for the first time in a decade.

It'san employment collapse that threatens to rival the massive layoffs inthe airline industry that followed the Sept. 11, 2001, terroristattacks, when some 100,000 employees lost their jobs.

"It's farfrom over," said Bart Narter, a senior analyst with Celent, aBoston-based financial research and consulting firm. "The subprimelending collapse will continue to ripple through the financial sector."

Forfive years, the nation's housing market was booming and mortgagecompanies grew quickly, at times offering lucrative jobs to people withlittle experience. But as home values declined and interest rates rosein the past year, rising delinquencies and defaults -- especially insubprime mortgages targeted at borrowers with risky credit -- havepounded lenders who couldn't keep pace.

"These kind of mortgagelenders just sprung up like mushrooms and grew like men," said John A.Challenger, chief executive at Challenger, Gray & Christmas. "Theystaffed up and now you have a bust."