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AmeriSave Wholesale, Suburban Mortgage Close; Homepoint To Lay Off 100s

David Krechevsky
Sep 01, 2022
Photo credit: Getty Images/Imilian

Mortgage lenders are the latest to abruptly shut down.

As the housing market continues to contract thanks to rising mortgage rates and shrinking affordability, the Thursday ahead of the long holiday weekend became a day of doom — two more mortgage lenders appear to have shut their doors, while a third lowered the boom on a significant number of its staff.

Both Atlanta-based direct-to-consumer lender AmeriSave Wholesale Mortgage Solutions (AWMS) and Phoenix-based lender Suburban Mortgage Inc. abruptly shut down, while Homepoint appears to have laid off hundreds of its employees.

AWMS announced its closing on Facebook. In a message posted Thursday to a mortgage loan officer group, the company stated it is “closing it doors effective immediately.”

Company officials did not respond to requests for comment.

The Facebook post states that AWMS will honor existing loans in the pipeline, but that “no new registrations” will be accepted after Sept. 1, 2022. 

“Loans in the pipeline must be locked by 9/2/22, by midnight,” it states, adding that “all loans must closed by October 31.”

The post states that “a team will remain in place to work through the pipeline with you from an operations standpoint.”

It adds, in a message to loan originators, that they “will be contacted shortly by your account manager to review your existing pipeline with you and to establish lines of ongoing communication.”

AmeriSave’s website was still active Thursday evening and did not show anything to indicate the company had closed. It is not known how many employees the company has, and the post did not provide any information regarding their fate. 

AWMS is a unit of AmeriSave Mortgage Corp. It is licensed in 49 states (all by New York) and the District of Columbia.

According to a news release issued on July 29, 2021, AmeriSave Mortgage Corp. reported funding nearly 80,000 refinance and purchase loans through the first six months of 2021, representing an 86% increase in refis and a 780% increase in purchase transactions year-over-year. 

Combined, the loans totaled $23 billion in volume, compared to $6.7 billion in the same period a year earlier, it said.

The news release also noted that, in June 2021, AmeriSave launched its wholesale division, AmeriSave Wholesale Mortgage Solutions. “To date, the department has over $250 million in the pipeline and has added over 250 new brokers to the team,” the news release states.

“Our wholesale division has taken off rapidly and surpassed all expectations,” Michael Brenning, president of Wholesale Lending at AmeriSave Mortgage Corp., states in the release. “At this fast pace, our goal is to close $5 billion by year end and, beyond that, we want to become one of the top two wholesale lenders nationally. Not only do we want to be the best, but we also want to be the most reliable name in the industry.”

Because the company is privately held, no information is available about how AWMS fared financially through the first half of 2022.

Meanwhile, Suburban Mortgage also appeared to have closed. Its website can no longer be reached, and according to published reports employee emails have been disabled.

Company officials did not respond to requests for comment. 

According to its LinkedIn profile, Suburban employed between 51 and 200 workers. The company was founded in 1988 and specialized in residential mortgage loans.

These two companies join a growing list of mortgage industry businesses that have closed up shop in the past couple of months, including First Guaranty Mortgage Corp. and Sprout Mortgage. In addition real estate fintech Reali announced plans to close its door on Friday, Sept. 2, 2022.

Then there's Homepoint. The third-largest wholesale lender laid off hundreds of employees, according to a company spokesperson. The spokesperson did not provide an exact figure for the number of layoffs, but denied rumors that it was 50% of the company's staff.

The spokesperson said that "reductions are happening across the organization," and added that the job cuts are "consistent with what we discussed during our second-quarter earnings call, where we acknowledged our openness to get smaller as an organization to effectively counter severe market pressures."

The company said affected employees were given 60-day notice that their jobs are impacted, so their last day will not be until November. It did not say whether any severance package was offered, although the spokesman said the company has "thoughtfully looked across our Human Resource policies and plans on severance, equity, and healthcare to support our impacted associates as they transition."

The reduction in force will effectively save Homepoint over $100 million annually, the spokesperson said.

Home Point Capital Inc., parent of Home Point Financial Corp. (which does business as Homepoint), reported a net loss of $44.4 million, or 32 cents per diluted share, in the second quarter, compared to net loss of $73.2 million, or 53 cents per diluted share) in the second quarter of 2021. The loss followed a net gain in the first quarter of 2022, when it posted net income of $11.9 million or 8 cents diluted share.

In June, the company announced a restructuring that would eliminate about 10% of its workforce, which at the time was estimated at about 4,000 workers.

The spokesman for Homepoint also provided an official statement from the company:

"We are in the process of taking the painful step of reducing our workforce to ensure Homepoint is best positioned to navigate the current high-rate, low-margin environment," the company said in the statement. "It is difficult to say goodbye to associates whose dedication to our partners and customers have greatly contributed to our company’s success in our first seven years of business."

The statement added, "Over the last several months, we have executed multiple strategic actions to minimize the human impact as much as possible, but continually worsening market conditions make this additional step necessary. While these decisions are difficult, we remain committed to building a sustainable company that provides a best-in-class experience to the partners and customers we serve."

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