Late last week we warned that according to real-time indicators, such as soaring mortgage rates and collapsing demand, a housing market crash appeared inevitable. Today we got the clearest sign that the banks agree when out of the blue – or rather out of the “hurricane” – JPMorgan announced it was cutting over a thousand home-lending employees and reassigning hundreds more after soaring interest rates dried up mortgage demand.
Jamie Dimon pulled off his best Jean-Baptiste Emmanuel Zorg impression when the bank decided that more than 1,000 workers will be affected by the slowdown in housing, with roughly half fired and the other half moved to other (less paying) divisions within the bank, Bloomberg reports.
“Our staffing decision this week was a result of cyclical changes in the mortgage market,” a JPM spokesperson said while probably eyeing the record move in the 30Y mortgage which has doubled from just over 3% at the start of the year to a stunning 6.13%, a move which has unleashed an affordability crisis.
JPM spokesperson continued: “We were able to proactively move many impacted employees to new roles within the firm, and are working to help the remaining affected employees find new employment within Chase and externally.”
Translation: we made the remaining mortgage bankers serve dessert in the cafeteria, and in a few weeks they will all be quietly fired for gross incompetence.
It’s not just JPM: Wells Fargo, recently the biggest mortgage lender among US banks (nobody knows anymore what Wells really does any more with all the rampant crime and corruption at the bank), has also been laying off and reassigning employees in its home-lending division, Bloomberg also reported. And earlier this month, real-estate giants such as Compass and Redfin also announced plans to trim their workforces amid the cooling US housing market. Compass said in a regulatory filing that it will cut about 10% of its workforce, or about 450 employees, while Redfin plans to layoff about 6%, amounting to roughly 470 workers.