Non-QM lender Kiaviwhich specializes in fixed and reverse loans and investor loans, has laid off 39 employees, sources told HousingWire on Thursday.
An email sent to employees on Wednesday morning says Kiavi has reduced the size of the company by approximately 7% “to reduce our cost structure and protect the financial health of the business.” Kiavi has more than 300 employees, according to the company’s website.
“We were and are still going so well,” one employee, who requested anonymity, told HousingWire. “The problem is that we are not supported by Government Sponsored Enterprises (GSE). Because we’re in the hard money space, we don’t have a lot of investors willing to buy our assets because of rate hikes, that’s what our CEO told us.
Of the 39 employees made redundant, 12 cuts affected the human resources team. The cuts also affected the operations, risk and compliance, legal, finance, business operations and marketing teams, according to a presentation held Wednesday afternoon.
Employees will be laid off on Friday, July 15. They will receive 12 weeks of severance pay, according to the employee.
Kiavi, founded in 2013 and led by CEO Michael Bourque, expanded to three states in June and now operates in 32 states and Washington, D.C. The company closed a $218 million securitization of residential bridging loans ( RTL) in June, which was to provide capital to support approximately $750 million in loan originations over the term of the agreement. The lender planned to offer construction loans, but rising interest rates put a stop to that and forced Kiavi to issue pink slips.
A Kiavi spokesperson did not respond to requests for comment.
“After updating our financial projections for recent changes, we have identified a cost savings target necessary to ensure that we can generate sufficient cash in 2023,” showed a presentation slide shared with affected employees. .
Kiavi, which changed its name from Lending Home in November, ranked as the top short-term lender in the fix-and-flip space in 2021, with $2.7 billion in issuance, up from 78% from 2020, according to a recent report from Inside Mortgage Finances (IMF).