U.S. banks that have been earning record profits from home loans are adding or transferring thousands of staff to catch up with demand for refinancing after shortages blocked homeowners from getting lower rates.
Employment tied to mortgages rose 9 percent this year through September to 285,000, the most since 2008, according to the Bureau of Labor Statistics, as lenders responded to Federal Reserve efforts to push down borrowing costs, PresidentBarack Obamaloosened requirements, and housing recovered from a six- year slump. Even as banks added staff, they failed to keep pace, and keptmortgage rates“much higher” than they should be to curb demand, said Vipul Jain, an analyst at Morgan Stanley.
Banks are adding home loan staff after the top five companies reported a record $8.35 billion in income from mortgage banking during the third quarter, according to newsletter Inside Mortgage Finance. In contrast, the six largest U.S. banks have reduced headcount by more than 25,000 in the twelve months ended in September, as regulators demand more capital and global growth slows, according to data compiled by Bloomberg.