At Inman Connect Las Vegas, July 30-Aug. 1, 2024, the noise and misinformation will be banished, all your big questions will be answered, and new business opportunities will be revealed. Join us.
Mortgage lender Newrez LLC is cutting another 277 positions, including senior executives in Colorado, Arizona and Florida, bringing to 750 the total number of layoffs in the wake of a recent acquisition spree by parent company Rithm Capital Corp.
Newrez had previously eliminated 473 jobs in May and June after Rithm closed its $720 million acquisition of Specialized Loan Servicing LLC and its parent company, Computershare Mortgage Services Inc.
The latest round of layoffs will take effect Aug. 26 for 187 employees at Newrez’s Greenwood Village, Colorado, facility; 78 workers in Tempe, Arizona; and 12 employees in Jacksonville, Florida, according to Worker Adjustment and Retraining Notification (WARN) Act notices filed by Newrez in those states.
In Florida, Newrez is parting ways with three senior vice presidents, a vice president and two assistant vice presidents. Three vice presidents and two assistant vice presidents will lose their jobs in Colorado, along with operations employees including dozens of customer support specialists, application support analysts, cashiering associates and special loans associates.
In a statement to Inman, Newrez said the acquisition of Specialized Loan Servicing created job redundancies that the company spent months assessing.
“We recently made the decision to reduce the number of roles in certain geographies across the Newrez organization – this was a necessary step as we continue to focus our business on and invest in our core markets,” the company said. “We take all personnel decisions extremely seriously and are committed to supporting affected employees through this transition.”
Newrez declined to comment whether additional layoffs might be in store.
Based in Fort Washington, Pennsylvania, Newrez sponsors 731 mortgage loan originators working out of 86 branch locations, down from 983 loan originators at 155 locations in October, according to Nationwide Multistate Licensing System records.
Newrez is also partnered with real estate brokerages in a number of mortgage joint ventures through its Newrez Ventures platform, formerly known as Shelter Mortgage Company.
In acquiring Specialized Loan Servicing and Computershare Mortgage Services, Rithm added $149 billion to its mortgage servicing portfolio, which totaled $857 billion as of March 31 (including $225 billion in loans serviced for other lenders who retain the servicing rights).
Competing loan servicing giant Mr. Cooper, which has grown its loan servicing portfolio from $650 billion in 2021 to more than $1 trillion this year, has also laid off hundreds of workers and is investing in a multi-year AI initiative aimed at slashing hundreds of millions of dollars in annual call center expenses.
In February, Newrez announced it was partnering with Microsoft to use its Azure OpenAI Service to provide 24/7 customer support using AI-powered chatbots, and analyze customer data and preferences to recommend suitable products.
Kedar Sathe
“AI will help us reimagine how we serve our customers and run our business,” Rithm Group and Newrez CIO Kedar Sathe said in a statement at the time. “We have access to a tremendous amount of data regarding customer behavior, products, and markets — we have only begun to scratch the surface on the applications of this technology to fundamentally change the mortgage customer journey. The projects in this initiative empower our customers to engage us at any time and place while allowing Newrez to operate more effectively and efficiently.”
Asked whether its investment in AI was a factor in recent layoffs, Newrez said only that the company continues “to evaluate applications of AI to empower our employees.”
Some of the employees Newrez has laid off perform similar roles as workers at Computershare Mortgage Services and Specialized Loan Servicing, which now does business as Shellpoint.
On May 2 — the day after the SLS acquisition closed — Newrez notified state labor departments in Colorado and Florida of its plans to lay off 156 workers — 103 in Colorado, and 53 in Florida — beginning July 1.
On June 3, Newrez filed another WARN Act notice with Colorado officials, informing them of plans to lay off 317 employees from the company’s Greenwood Village facility beginning on Aug. 2.
Newrez origins and growth under Rithm
Source: Newrez LLC.
Before changing its name to Rithm Capital in 2022, New Residential Investment Corp. (as the company was known at the time) acquired Caliber Home Loans and Genesis Capital in 2021.
The $1.675 billion Caliber Home Loans deal — part of a strategy to expand the company’s origination, servicing and asset management capabilities — included $141 billion in mortgage servicing rights. Most of Caliber’s loan originators were laid off after that deal closed.
Rithm cut more than 6,500 workers from its payrolls to reduce expenses in 2022, primarily within its mortgage originations segment. After starting out 2022 with 12,296 people on the payroll, Rithm cut its workforce by 53 percent, finishing the year with 5,723 workers.
The operations of Caliber were fully integrated into Newrez in the fourth quarter of 2023, with a number of former executives ending up at Ohio-based Union Home Mortgage.
Rithm closed another big deal in November — the $720 million acquisition of Sculptor Capital Management Inc., a hedge fund that invests in debt, real estate and “multi-strategy platforms” with $32 billion in assets under management.
As of Dec. 31, 2023, Rithm reported a total of 6,570 employees on its payroll, of whom 5,656 worked in mortgage origination and servicing.
Editor’s note: This story was updated with additional comments from Newrez.
Get Inman’s Mortgage Brief Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.
Email Matt Carter
