Rising interest rates causing layoffs

NEW YORK, Sept. 10 (UPI) -- The increase in mortgage interest rates has dampened mortgage refinancing, resulting in layoffs at major U.S. mortgage lenders.

Countrywide Financial Corp., the nation's largest independent mortgage lender, has shed 500 jobs since July, and online lender E*Trade Mortgage laid off 163 telephone-service representatives, the Wall Street Journal reported.

"The industry has been living off refis," said David Olson, managing director of Wholesale Access Mortgage Research & Consulting Inc., in Columbia, Md.

"And rising employment in the industry has been a direct function of that. With refinancings down greatly, we're expecting a major reduction in workers."

While the employment cuts represent less than 5 percent of Countrywide and E*Trade Mortgage companies' work forces, industry executives expect mortgage providers will lose more than 150,000 employees from their payrolls over the next six months, according to Olson.

Industrywide, refinancing has fallen by 78 percent since May, according to a late-August Mortgage Bankers Association of America report, the Journal said.