RoundPoint Mortgage Servicing Corp., a nonbank mortgage lender and refinancer, will close its Melville offices this fall, laying off 71 employees, according to a recent state filing.
The Fort Mill, South Carolina-based housing lender and repairer said in a worker adjustment and retraining notice released this week that it may close its Long Island office, located at 175 Pinelawn Rd. on October 27.
Officials of RoundPoint or its parent company Freedom Mortgage Corp. did not return requests for comment.
Founded in 2007, RoundPoint was acquired in 2020 by Freedom Mortgage, a full-service mortgage company headquartered in Mount Laurel, New Jersey. At the time of purchase, RoundPoint was managing approximately $75 billion in outstanding principal balances on mortgages.
“RoundPoint brings over 378,000 new clients to the Freedom ecosystem,” Stan Middleman, chief executive of Freedom Mortgage, said in a 2020 press release about the acquisition.
The closure of RoundPoint’s Long Island office comes as the mortgage industry reels from rising interest rates.
“The mortgage origination industry is experiencing a major contraction this year which has been largely triggered by interest rates which have risen from 3.5% to 5.5% or 6% since the start of the year,” said Guy Cecala, executive chairman of Inside Mortgage Finance, a research firm and publisher of the U.S. residential mortgage market.
“It’s put the brakes on a lot of mortgage lending,” he said. “That certainly put a damper on refinancing.”
Cecala said new mortgage issuance is expected to drop 50% for lenders across the country over the year, and traditional lenders like banks as well as non-bank lenders are affected.
JPMorgan Chase and Wells Fargo recently announced the layoffs of hundreds of employees in their home loan units.
With new mortgages and refinance applications down this year, Cecala said lenders and managers who hired extra staff to meet the needs of last year’s new loan demand are now taking “moves significant” to “readjust” their workforce. “.
“I think we see that all over the country,” he said.