When Silver Hill Funding LLC and the wholesale division of Lakeview Loan Servicing LLC announced plans to combine in November 2021, Silver Hill Managing Director Leslie Smith said the merger would be “seamless.”
That was four rounds of layoffs ago.
The most recent round occurred Jan. 10, when the company held a video-conference call with 27 employees, according to a former employee who spoke with NMP on condition of anonymity to protect his severance package.
The employees on the call, which lasted about 10 minutes, received severance packages that included payment of remaining paid time off and were told their health insurance would run through the end of January. They also were provided information about extending their insurance through COBRA.
According to the former employee, an insider with knowledge of the company’s operations, Silver Hill has conducted at least four rounds of layoffs since the merger with Lakeview was completed in the first quarter of 2022.
The first came in late February/early March of 2022, the employee said, followed by another last summer, and a third in November, before the final round this month.
“By my estimation, they’re down to a skeleton crew,” the former employee said. “Maybe around 20 people.”
Neither Silver Hill nor Smith have responded to requests for comment from NMP.
At the time of the merger, Silver Hill was both a direct and a wholesale mortgage lender, offering a mix of wholesale commercial and 1- to 4-unit investor loan products, and employed between 70 and 80 people. Lakeview, which employed more than 100 people, is a residential mortgage lender, and a member of the Bayview Companies, which include parent company Bayview MSR Opportunity Master Fund LP and certified minority-owned firm Bayview Asset Management.
When the merger was announced, a news release included the following statement from Smith, Silver Hill’s managing director: “Our seamless transition to becoming a full-service solution provider will make us more agile and even better equipped to meet the evolving needs of our broker customers while providing them with a simplified transaction process and the tools to grow their mortgage business.”
Since then, however, Silver Hill has eliminated most of its residential programs and instead has focused on commercial and Debt-Service Coverage Ratio loans. On its website, the company promotes programs for loan amounts between $100,000 and $2 million for purchase, refinance, or cash loans, either for commercial or DSCR loans.
“When they merged they eliminated most of the residential programs, but they held onto the bank statement residential program,” the former employee said. “As summer progressed and the housing market completely blew up, [Silver Hill] eliminated all of the residential programs.”
That prompted the summer layoffs, which affected employees with only residential lending experience, the former employee said, adding that Silver Hill “kept some employees who adapted well to being able to sell commercial, but fewer than not.”
The November layoffs affected employees in marketing, business development, and operations, the former employee said.
Combined with the most recent round of layoffs, it appears Silver Hill has retained only “the bare minimum amount of people to keep the doors open as long as they can,” and will attempt “to lose as little money as they can until the market rebounds,” the former employee said.
That won’t be an easy task, the former employee said, because Silver Hill is finding it increasingly difficult to securitize its loans.
“They are holding them, and the longer they hold them the harder it is,” the former employee said. “Luckily, they now have Bayview as parent company, and Bayview has the pockets to do it for a while.”
Bayview Asset Management manages a portfolio of more than $14.6 billion.
In addition, because Silver Hill is holding onto its loans, it is “only doing the most pristine loans,” the former employee said. “The guidelines are tough; no exceptions. And they are not [offering] great rates. They can’t compete on a rate level.”
Even after being laid off earlier this month by Silver Hill, the employee still had kind words for the company and its management, saying it always treated its employees well and the cuts were necessary for the company’s survival.
“There is no bitterness in what I say, is what it is,” the former employee said. “If they call me in a year, I’d take that call.”
