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| Just two week ago, NetMore America Inc. — which added more than 150 new employees last year — was on track to originate $1.5 billion this year. Now, the company is laying off employees and curtailing third-party refinance business as its lending capacity has been exceeded.A report provided by the Walla Walla, Wash.-based firm to MortgageDaily.com on Feb. 12 indicated originations rose from just 61 loans for $0.01 billion in 2007 to 2,800 loans for $0.59 billion during 2008. Employee count rose from only 42 at the end of 2007 to 210 this month.
In November, NetMore told MortgageDaily.com that it planned to hire another 50 people by August 2009. But those plans have apparently changed. NetMore laid off around 20 employees last week, President and Chief Executive Officer Mark Freedle told MortgageDaily.com in a statement today. The job cuts, which accounted for less than 10 percent of its workforce, were made to realign staffing with “with the ongoing credit crisis and lack of access to growth capital.” NetMore notified its third-party customers on Thursday that demand had exceeded its lending capacity. As part of a short-term plan, NetMore said it would give priority to purchase transactions — which will be handled within five days. Refinances will first be prioritized chronologically then by lock expiration date. The company suspended document preparation on refinances until it clears out the backlog of pending refinance closings. A limit of two extensions has been suspended — though NetMore cannot pay the extension costs. Freedle explained that the company was force to take the steps because fewer warehouse lenders are funding less business and growth capital has dried up. But he still projected $85 million to $100 million in monthly originations — about double 2008’s monthly rate. “We understand the frustrations you may be experiencing and wanted to let you know how we are handling our capacity at this time,” last week’s notification stated. “For those of you that have had loans come in for funding, we will be working with you as our capacity allows.” NetMore plans to adjust its strategy as origination volume normalizes. |
