Rocket Companies and United Wholesale Mortgage shed thousands of jobs

The nation's top two mortgage lenders — both headquartered in metro Detroit — shed thousands of jobs as the mortgage business lurched from boom times to an industrywide slump, according to newly released corporate filings.

Dan Gilbert's Rocket Companies, the Detroit-based corporate parent of Rocket Mortgage, formerly known as Quicken Loans, cut its employee headcount to about 18,500 people as of Dec. 31, down from 26,000 a year earlier.

During the same period, Pontiac-based United Wholesale Mortgage shrunk its headcount, from 8,000 to about 6,000.

Those employment figures were cited this week in once-a-year disclosures that the publicly traded companies filed with the Securities and Exchange Commission.

The plummeting headcounts at Rocket and UWM underscore the cyclical nature of the mortgage business and that potential impact on the local economy, considering the industry's No. 1 and No. 2 lenders are based here.

Nearly all of UWM's workforce is situated at the company's corporate campus in Pontiac, where employees walk between buildings — and above South Boulevard — on the longest enclosed pedestrian bridge in the world.

Rocket is headquartered in downtown Detroit and much of its workforce resides in the region. It is considered the largest employer in the city of Detroit. Still, its workers are geographically more spread out than UWM's.

According to SEC filings, Rocket Companies has a network of 16 corporate offices, 11 "client support locations" and four call centers throughout the U.S. and Canada. Some of those offices are for portfolio companies under the Rocket Companies umbrella that don't write mortgages, such as Rock Connections, Rocket Auto and Rocket Money, formerly known as Truebill.

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Rocket and UWM have felt the downturn in the mortgage business that began in late 2021 and sped up in early 2022 as interest rates rose, home sales slowed and mortgage refinancing activity dried up.

The end of the 2020-21 refinancing boom was especially painful for Rocket, as it did a lot of refinancings and refinancings can be very profitable. Last year, Rocket originated $133 billion worth of mortgages, a 62% decline from 2021. The firm's net income, or profit, for 2022 was $700 million, versus $6.1 billion in 2021.

For the past two quarters, UWM has originated more mortgages than Rocket, snatching what had been Rocket's crown as the nation's No. 1 mortgage lender. Rocket had held that title since 2018, when it surpassed Wells Fargo.

UWM says its reduction in headcount resulted from less hiring and regular “attrition,” not layoffs.

The Pontiac company this week reported $932 million in net income, or profit, for all of 2022, compared with $1.6 billion in 2021.

Racing to cut

Rocket, which this week reported its first quarterly loss since going public in 2020, has been racing to cut expenses amid the falling revenues.

Those cuts have included a 24% year-over-year reduction in marketing and advertising and 17% reduction in salaries, commissions and employee benefits, according to the SEC filings.

Rocket did incur $81 million in extra costs in 2022 related to doing employee buyouts.

During an earnings call Tuesday, Rocket Chief Financial Officer Brian Brown seemed to indicate that the company expects to keep headcount about where it currently is. Industry insiders often refer to workforce size as "capacity."

“As we think about capacity, we think we are in a good spot right now. We think we are ready for the homebuying seasons," Brown said.

A Rocket representative did not respond Thursday to a request for comment about its workforce reductions.

As for UWM, company CEO Mat Ishbia has repeatedly said that UWM has never done layoffs and never will.

"Based on market conditions, we no longer need to hire aggressively to grow our business and support our clients," a company spokesperson said Thursday in a written statement. "Through natural attrition, for various reasons — relocation, a family commitment, new opportunity, etc. — our team member count has balanced out. It’s important to note that our hiring classes now include 50-100 new team members, where before it was 400-500."

For years, another nationally ranked mortgage lender in metro Detroit was Troy-based Flagstar Bank.Flagstar was acquired late last year by New York Community Bancorp, which plans to rebrand the entire bank with the Flagstar name.

In January, the bank announced that it had restructured its mortgage division and laid off 10% of all bank employees, including some in metro Detroit, because of the nationwide downtown in the mortgage business.

Flagstar's mortgage division had fewer than 800 employees after the restructuring announcement, compared with 2,100 in 2021, the company said.

Another publicly traded local mortgage lender, Ann Arbor-based Home Point Financial, has done several staff reductions since 2021 and is scheduled to release its full 2022 earnings March 9.

This article originally appeared on Detroit Free Press: Rocket Companies, United Wholesale Mortgage shed thousands of jobs