Mortgage Loan Industry Job Toll Continues to Rise

At the offices of North Carolina mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he’ll be gone, too.

When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 25,000 who have lost jobs in the industry since the beginning of August - with more than half coming since last Friday.

With few exceptions, the cuts are the direct result of woes in the nation’s beleaguered real estate market.

More layoffs are announced daily.

On Wednesday, Lehman Brothers Holdings Inc. closed its “subprime” mortgage business, laying off 1,200 workers at 23 offices.

1st National Bank Holding Co., an Arizona mortgage company, said it has closed its wholesale mortgage unit and cut 541 jobs, as Accredited Home Lenders Holding Co. added 1,600 positions to the heap.

The night before, banking giant HSBC said it would close a main financing office and cut 600 jobs, a large percentage of its workforce.

Since the start of the year, more than 40,000 workers have lost their jobs at mortgage institutions, according to recent company layoff announcements and data complied by outplacement firm Challenger, Gray & Christmas Inc.

Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors also expects its membership to decline this year for the first time in a decade.

It’s an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when some 100,000 employees lost their jobs.

“It’s far from over,” said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. “The [bad credit mortgage] collapse ripples through the financial sector.”

For five years, the housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people with little experience.

But as home values declined and mortgage rates rose in the past year, many delinquencies and defaults - especially in subprime mortgages targeted at borrowers with risky credit - pounded lenders who couldn’t keep pace.

“These kind of mortgage lenders just sprung up like mushrooms and grew like men,” said John A. Challenger, chief executive at Challenger, Gray & Christmas. “They staffed up and now you have a bust.”

In fact, even America’s largest mortgage lender, Countrywide Mortgage, began a number of undisclosed layoffs this week.

Continue reading this Yahoo! finance article on the widespread layoffs gripping the mortgage industry …