Hiring Boom in Mortgage Restructuring
By Kyle Stock
The Wall Street Journal
November 19, 2009
Mortgage restructuring for strapped homeowners has emerged as a rare growth area in the economy as companies in the field keep hiring.
Four of the largest mortgages servicers -- Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. -- have collectively hired almost 17,000 people this year, mostly to work with financially ailing homeowners. With the number of defaults rising, many are planning to keep adding staff.
"We've hired folks, we've transferred folks within the company and everyone is working overtime. All hands on deck is really the right analogy," said J.P. Morgan Chase spokesman Thomas Kelly.
In October, about 12.4% of the 56 million U.S. households with mortgages -- or about 6.9 million households -- were 30 days or more overdue, or in the foreclosure process, according to LPS Applied Analytics, a research firm in Denver.
Wells Fargo, which services one in six U.S. mortgages, has almost doubled its staff working on restructurings, adding close to 7,000 employees this year. Citigroup has boosted its staff by about 54%, adding 1,400 positions. In Arizona, one of the states hit hardest by the subprime disaster, Citigroup opened a new service center staffed by 800 mortgage negotiators.
Loan-servicing companies report that people with a wide variety of backgrounds are applying for the jobs, from rental-car service representatives to former chief executives of small mortgage brokerages that went under.
One of J.P. Morgan Chase's best loan modifiers is a former police officer from Jacksonville, Fla., said Mr. Kelly, the spokesman. "She's terrific on the phone with customers because she knows how to calm people down," Mr. Kelly said.
New companies formed in response to the home-mortgage crisis also have been hiring. For example, Private National Mortgage Acceptance Co., dubbed PennyMac, was founded in 2008 by former executives of Countrywide Financial Corp. and now employs about 120 people.
Nate Cadena, who used to sell loans for AmeriCash Mortgage Bankers, is one of PennyMac's loan modifiers. He said his job today isn't all that different: He gets on the phone with customers and tries to figure out how much they can afford to pay each month.
Mr. Cadena, 32 years old, said he used to earn "very lucrative pay" as a loan salesman. But he said that since the economy tanked, he was forced to take a job as a door-to-door salesman, an experience that readjusted his goals and perspective. "It used to be that I wanted to make as much money as I could," he said. "Now it's about a career path and stability."
Executives at mortgage servicers say most workers dealing with borrowers earn between $30,000 and $60,000 a year plus bonuses, and spend their days talking to delinquent or financially strapped mortgage borrowers. The modifiers present a number of options, with the aim of lowering the monthly payment to roughly one-third of household income.
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