It is impossible to count the thousands of workers who have lost mortgage-related positions since the financial meltdown in 2008. So we are not surprised when Chicago, Illinois-based MB Financial decided to leave its mortgage origination business outside of its Chicago footprint and layoff 495 employees in Michigan.
In the statement accompanying the company’s 1st Quarter – 2018 financial report, Mitchell Feiger, President and CEO, said ...
“Regarding mortgage, we announced earlier this month our plan to discontinue our national residential mortgage origination business. We had been pursuing a strategy of improving the profitability of our mortgage business by growing retail originations, which have typically been more profitable and consistent. However, with recent economic changes, the competitiveness of the mortgage industry, and recent low origination margins, we determined that we would be unable to successfully execute that strategy within a reasonable period of time. We plan to continue originating residential mortgage loans in the greater Chicago area through our mortgage retail offices, retain the mortgage servicing asset as well as our mortgage servicing operation in Wilmington, Ohio, and continue holding residential mortgages on our balance sheet."
It appears that the financial industry has not learned its lesson from the near collapse of the global banking system and continues to shift mortgage risks from originators to investors through the use of dangerous and dubious derivatives. Dodd-Frank, the legislation named after two of the most corrupt politicians in the financial arena, Senate Banking Chairman Christopher Dodd (D-CT) and House Financial Services Committee Chairman Barney Frank (D-MA), is a major failure with the largest financial institutions which pose a systemic risk to our economic universe growing even bigger. Even worse, the politicians are once again lowering sound underwriting requirements to generate more originations for Wall Street and to serve the underserved minority and poor borrowers who cannot afford a car, let alone a house.
What does this portend for employees in the financial sector and the greater population? It appears that the unthinkable “black swan” event is now turning into a move-visible and more-likely “grey swan” scenario.
Are you asking yourself, Am I Next?