Domestic Outsourcing Jobs Axed

On Nov. 19, Financial ServiceSolutions notified over 200 loan fulfillment workers that they would continue receiving pay for only another 60 days, company president and chief executive Greg Sullins told MortgageDaily.com.

The reduction will leave the company with approximately 200 employees, which includes about 60 corporate-function employees, according to the executive. The event marks the second time this year layoffs have occurred at the Louisville, Ky., loan fulfillment center — 30 were laid off during the first quarter.

The cutbacks are “really a reflection of the lack of refinancings and lack of overall mortgage volume,” he said.

Industrywide, the Mortgage Bankers Association’s latest forecast has originations totaling $2.8 trillion this year, of which refinances are expected to comprise $1.2 trillion — a sharp decline from 2003 when refinance originations of $2.5 trillion made up two-thirds of overall volume.

Lower refi activity has contributed to over 10,000 layoffs at Washington Mutual, 1,500 job cuts at Guaranty Residential Lending, and reportedly over 200 layoffs at Bank of America, an investor in Financial ServiceSolutions.

Financial ServiceSolutions, headquartered in Charlotte, N.C., was formed in April 2003 through a joint venture between BoA and Fidelity National Information Solutions Inc. to provide mortgage companies with loan processing and closing, underwriting, document preparation and other functions.

Three months later, the mortgage business outsourcing company announced they would establish their base of operations in a subleased Louisville facility that BoA occupied for mortgage servicing operations. BoA said it made a strategic decision to relocate that work to New York and North Carolina — a move that affected approximately 750 employees — and Financial ServiceSolutions said in the July announcement it would offer employment to the BoA associates.

In a September announcement, Sullins said the company was poised to “rapidly grow [its] business to over 1,000 employees.”

Financial ServiceSolutions ended up hiring about 400 of BoA’s mortgage servicing employees for the loan processing center, according to the executive.

The company has processed more than 80,000 loans this year, Sullins said, but the rising rate environment has significantly lowered consumer demand for refinancings.