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Mortgage Layoffs at NetBank

Mortgage Layoffs at NetBank

56 associates let go during Q2

August 24, 2006


photo of Coco Salazar
Weakened nonconforming originations led to layoffs at NetBank Inc.

The Atlanta-based lender let 56 associates go during the second quarter, Rich Jeffers told in an e-mail statement.

The decision followed an evaluation of various business lines from a risk-adjusted return on capital standpoint, according to the company’s second quarter earnings announcement. As part of the effort, NetBank is pursuing a mortgage servicing portfolio and platform sale and made a number of changes in its nonconforming operations during the quarter, including a moved focus to products that carry better margins and less repurchase risk that allowed it to cut staffing by about 16 percent.

Nonconforming originations reportedly declined three consecutive quarters to $479 million as of June 30, 2006 — about 21 percent lower than in the first quarter and 45 percent below the level a year earlier.

Noting that the company’s staffing model is based on origination volume and adjusts as necessary, Jeffers said NetBank is comfortable with current staffing levels. About 1,800 people work in its direct and indirect conforming, and indirect nonconforming channels.

In addition, because NetBank continues to pursue selling the mortgage servicing platform along with the portfolio, it is likely the associates who work in the servicing shop will stay with the buyer, he added.

Coco Salazar is an assistant editor and staff writer for

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