NewRez, division of Citizens Bank shed employees

NewRez, the mortgage origination and servicing business of Rithm Capital, and Franklin American Mortgage, a division of Citizens Bank, conducted layoffs last week, multiple sources told National Mortgage News.

The total number of employees impacted in both companies remains unknown. A Maryland WARN notice filed by NewRez on November 2 shows that 24 employees were let go. Though there is a strong likelihood that the number is significantly larger company wide.

NewRez did not respond to multiple requests for comment.  

A spokesperson for Citizens Bank confirmed that layoffs did occur, and said that “a reduction in mortgage volume” required the lender to make “difficult but necessary decisions related to organizational structure in our mortgage business.” However, the spokesperson declined to provide information about how many employees were let go.

“We are working with impacted colleagues to provide support, including outplacement and job search support,” the Citizens spokesperson said in a statement. “Impacted colleagues are eligible for severance and have the option to search for other open positions at Citizens. We will continue to have lending operations out of both our Franklin, TN and Irving, TX offices.”

Underwriters, loan officers, tech personnel and even graphic designers at NewRez have been affected across the nation, according to LinkedIn posts. Their positions will be terminated effective December 31, 2022. 

Rithm Capital, the parent company of NewRez, in its third quarter earnings revealed that new mortgage production fell 28% to $13.8 billion in the third quarter, down from $19.1 billion in the second, as surging mortgage rates kept borrowers away. The third-quarter number was 60% below the $34.5 billion generated during the same three months last year.

Layoffs have swept through the industry in recent weeks as lenders disclosed their third-quarter earnings.

Last week, Mr. Cooper also announced that it is slashing approximately 800 positions, calling it a “disciplined” and “proactive step to scale back the origination business.” Meanwhile, CrossCountry Mortgage cut 100 positions, per a Colorado WARN notice.