Option One Mortgage Corp. will layoff about one-fifth of its staff -- mostly production jobs, as it consolidates operations and exits the correspondent business.
The subprime mortgage unit of H&R Block Inc. notified approximately 600 employees yesterday that their jobs will be eliminated by Sept. 3, Option One spokeswoman Christine Sullivan told MortgageDaily.com. By that date, 12 mortgage processing centers will close doors.
"Like others in the industry, we're aligning our cost structure to current origination volume and revenue," Sullivan said. The action also recognizes "a significant investment technology that improved workflow in our loan processing branches."
Also contributing to the layoffs is the subprime unit's decision to exit the bulk/acquisition flow correspondent business in order to focus more on its core origination business, which is wholesale lending. The correspondent channel accounted for a small amount of volume, Sullivan said.
Option One will continue to serve brokers nationwide on a flow basis and through its CorOne program, which provides mortgage-banker clients with operational support such as pre-close underwriting, she added.
The offices slated for closure are located in Tempe, Ariz.; Milwaukee, Wis.; Philadelphia; Foxborough, Mass.; Charlotte, N.C.; Columbus, Ohio; Ft. Lauderdale, Fla.; Bellevue, Wash.; Saratoga, Calif.; Rancho Cucamonga, Calif.; Rolling Meadows, Ill.; and Sterling, Va., she said.
The company will also relocate its Lake Forest, Calif., branch to Irvine by July 13.
About 66 percent of the 600 affected employees are production personnel, 14 percent are sales employees and 20 percent serve corporate support roles, the spokeswoman said.
After all phases of the consolidation are complete on Sept. 3, Option One anticipates having staff of between 2,300 and 2,400, according to Sullivan.
Last month, H&R Block Mortgage disclosed it will be closing two Florida offices as part of the restructuring of the prime retail mortgage origination business into H&R Block Bank. As a result, the prime lending unit notified 141 employees in Tampa and 63 workers in Jacksonville that their jobs would be phased out through June 2 and July 2.
The prime mortgage job cuts are unrelated to Option One, which reportedly expects to be acquired by Cerberus Capital Management L.P. by Oct. 31.