Citizen’s Mortgage cuts staff
One year after relocating to the Carson Valley from Bloomington, Minn., Citizen’s Mortgage, Inc. has cut its staff by more than 50 percent.
The company, which started with 33 employees – 14 who moved from Minnesota to Nevada – is now down to a staff of 14.
The latest cut, five employees in the underwriting and document preparation departments, is due to the rise in interest rates, according to Jim Gibbs, executive vice president.
“We’ve closed the underwriting and document preparation departments, and will be farming that work out,” he said. “If the rates go down again, we’ll definitely be opening those departments back up.”
Gibbs said the identity of the five laid off employees – two who had moved from Bloomington with the company last year, one who was hired out of state through application, and two who were hired locally – are being kept confidential.
“We don’t want to do anything to make their transition any harder,” he said. “We’ll do anything we can to help them.”
Gibbs, who has been in the mortgage business for 18 years, said he’s seen the cyclical nature of interest rates enough to know that today’s rate may change.
“Because of the higher interest rates, (currently 8.25 percent), our entire industry has been hit dramatically,” Gibbs said. “A lot of our business came from refinancing, and people aren’t doing that as much now with the higher rates. When I started in this business, the rate was 18 percent – no one was refinancing then, either.”
– The company. Citizen’s Mortgage, Inc., was founded in 1989 by John Billins, after 20 years of being in the mortgage business as an employee.
As of January 1999, CMI had 33 locations in the United States with 250 employees. Gibbs said there are now 16 locations nationwide with approximately 125 employees.
January 1999 marked the grand opening of the new headquarters in Minden – a two-story 16,000-square-foot building, built by Mike Hickey Construction on Highway 88 across from Douglas High School. According to Gibbs and Billins, the decision for the move was made for a variety of reasons – quality of life, decreased taxes, etc.
– It’s happened before. In 1994, Gibbs said, there were cuts in the industry due to interest rate increases, and though 1998 began with a refinancing boom, by May or June the rates went up, causing the start of the refinancing slump that led to this month’s layoffs.
Though the layoffs signal a dip in Citizen’s Mortgage, Inc.’s business, Gibbs said it won’t lead to a move back to Minnesota.
“When we moved here, the intent was to make this a central location, and I don’t see it changing,” he said. “We’re in the process of refocusing the business back to nonconforming subprime loans for people who have a hard time getting standard financing. There’ll be lot of consolidation in the whole industry. These are cyclical trends that we’re used to – interest rates come and go.”
Gibbs said further rises in the interest rates could result in more layoffs.
“If it gets too high, I may be out looking for work,” he said.