Mortgage Investors Corp. (MIC), one of the largest refinancers of home loans for veterans, has reportedly laid off nearly 500 workers, including 256 in its St. Petersburg, Fla., headquarters, and has stopped making new home loans.
In a report in the Tampa Bay Times, Bill Edwards, company chairman, blamed the near-shutdown on soon-to-be-implemented federal regulations under the Dodd-Frank Act. He told the newspaper that his company doesn't have the technology in place to comply.
In total, MIC plans to lay off about 476 people, leaving a staff of fewer than 40 at its headquarters. The company reportedly plans to wind down operations in 26 states where it has been selling and servicing Veteran's Affairs (VA) loans.
Nearly 200 of the jobs were loan processors and appointment setters, according to the report.
MIC had announced in July that it would be laying off about 380 employees, including about 211 call center agents and about 120 loan processors. That announcement came about a month after the Federal Trade Commission (FTC) levied a civil penalty of $7.5 million on the company for violating the federal Do Not Call Registry.
At the time, Edwards said the layoffs were the result of ‘unforeseeable circumstances due to the recent sudden and dramatic spike in interest rates and, more importantly, the fact that the secondary market for mortgage-backed securities has become extremely illiquid.’
The FTC fined MIC for calling nearly 5.4 million telephone numbers on the Do Not Call (DNC) registry. It was reportedly the largest fine for a violation of DNC rules to date.
This time around, Edwards is blaming the Dodd-Frank rules for the layoffs.
‘We've attempted to decipher all 2,300 pages of the Dodd-Frank Act,’ he told the Tampa Bay Times. ‘Our entire team has dedicated enormous energy to reviewing all aspects of the new regulations that are now coming into effect. Sadly, we've concluded that it's no longer cost-effective for us to originate new loans for our nation's veterans, nor do we understand how to implement these new government guidelines.’
