Mortgage lender to close Melville office, lay off 71

RoundPoint Mortgage Servicing Corp., a non-bank mortgage lender and refinancer will be closing its Melville offices this fall, laying off 71 employees, according to a recent state filing.

The Fort Mill, South Carolina-based housing lender and servicer said in a Worker Adjustment and Retraining Notification posted this week that it could be closing its Long Island office, located at 175 Pinelawn Rd. on Oct. 27.

Officials with RoundPoint or its parent company Freedom Mortgage Corp. did not return requests for comment.

Founded in 2007, RoundPoint was acquired in 2020 by Freedom Mortgage, a full-service mortgage company headquartered in Mount Laurel, New Jersey. At the time of the purchase, RoundPoint serviced approximately $75 billion in unpaid principal balances on mortgages.

"RoundPoint brings over 378,000 new customers to the Freedom ecosystem,” Stan Middleman, chief executive of Freedom Mortgage, said in 2020 in a news release about the acquisition.

The closure of RoundPoint’s Long Island office comes as the mortgage lending industry is reeling under the impact of rising interest rates. 

“The mortgage origination industry is going through a major contraction this year that’s largely been triggered by interest rates jumping from 3.5% to 5.5% or 6% since the beginning of the year,” said Guy Cecala, executive chair of Inside Mortgage Finance, a research firm and publisher tracking the U.S. residential mortgage market.

“That’s put the brakes on a lot of mortgage lending,” he said. “It certainly put the brakes on refinancing.”

Cecala said the issuance of new mortgages is likely to be down by as much as 50% for lenders across the country for the year, and that both traditional lenders like banks as well as non-bank lenders are impacted. 

JPMorgan Chase and Wells Fargo have recently announced layoffs of hundreds of employees in their home-lending units.

With declines in new mortgages and requests for refinancing this year, Cecala said lenders and servicers who hired additional staff to meet the needs of last year’s demand for new loans are now taking “significant moves" to "‘right-size’ their head count.".

“I think we’re seeing this all around the country,” he said.