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Flagstar Bank layoffs hundreds in mortgage division

Flagstar Bank lays off hundreds in mortgage division

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Flagstar Bank in Troy has layoffs dozens of employees across multiple states and is closing a portion of its national mortgage operation less than two months after merging with a New York bank, according to a news media report and social media posts.

According to Housingwire.com, citing unnamed bank managers and employees, employees were informed in a surprise conference call Thursday that Flagstar was closing its direct-to-consumer mortgage division and that many were now out of a job, though severance was offered based on tenure and job position.

The exact number of layoffs is unknown.

The layoffs report comes at a time when the mortgage industry is in a slump, with lenders in metro Detroit and across the country laying off employees in the last year due to higher mortgage rates and fewer refinancing opportunities.

Flagstar was acquired in an all-stock transaction on December 1 by New York Community Bancorp, creating the nation’s 24th-largest bank with 395 branches in nine states, approximately 7,800 employees, and more than $58 billion in deposits. This year, the entire bank will be rebranded as Flagstar.

Flagstar cut 20% of its mortgage staff, or 420 people, early last year as its volume of business began to decline.

Some of the newly laid-off Flagstar employees have taken to social media to express their dissatisfaction, claiming that there was “no warning” and that their access to the company computer system was immediately terminated.

After surviving multiple rounds of layoffs in her 26-year career, one Flagstar employee in metro Detroit posted on Facebook, “today the streak broke.”

“My job was eliminated. It pains me so much that it was at a time in my career where I was the happiest and felt I had so much to look forward to …. But onward and upward!!!”

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