(snip)"CHARLOTTE, N.C - At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he’ll be gone, too.
“It’s pretty much a ghost town over there,” Clark said. “Somebody went in and took the furniture from the lobby. I don’t know who did that. I put some of the other stuff in the back and locked it up.”
When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month — with more than half coming since last Friday. With few exceptions, the cuts are the direct result of woes in the nation’s housing market.
More layoffs are announced daily. On Wednesday, Lehman Brothers Holdings Inc. closed its “subprime” mortgage business, laying off 1,200 workers at 23 offices; Scottsdale, Ariz.-based 1st National Bank Holding Co. closed its wholesale mortgage unit and cut 541 jobs, and Accredited Home Lenders Holding Co. added 1,600 positions to the heap. The night before, banking giant HSBC said it would close a main financing office and cut 600 jobs.
Since the start of the year, more than 40,000 workers have lost their jobs at mortgage lending institutions, according to recent company layoff announcements and data complied by global outplacement firm Challenger, Gray & Christmas Inc. Meanwhile, construction companies have announced nearly 20,000 job cuts this year, while the National Association of Realtors expects membership rolls to decline this year for the first time in a decade.
It’s an employment collapse that threatens to rival the massive layoffs in the airline industry that followed the Sept. 11, 2001, terrorist attacks, when some 100,000 employees lost their jobs.
“It’s far from over,” said Bart Narter, a senior analyst with Celent, a Boston-based financial research and consulting firm. “The subprime lending collapse will continue to ripple through the financial sector.”
For five years, the nation’s housing market was booming and mortgage companies grew quickly, at times offering lucrative jobs to people with little experience. But as home values declined and interest rates rose in the past year, rising delinquencies and defaults — especially in subprime mortgages targeted at borrowers with risky credit — have pounded lenders who couldn’t keep pace.
“These kind of mortgage lenders just sprung up like mushrooms and grew like men,” said John A. Challenger, chief executive at Challenger, Gray & Christmas. “They staffed up and now you have a bust.”
America’s largest mortgage lender, Countrywide Financial Corp., began an undisclosed number of layoffs this week. Last week, Arizona mortgage lender First Magnus Financial Corp. shut down its operations and laid off nearly 6,000 workers. On Monday, Capital One Financial Corp. said it would shutter Greenpoint Mortgage, its wholesale mortgage banking business, and lay off 1,900 employees.
“It’s only been weeks,” Challenger said. “These companies are acting remarkably quickly, stopping on a dime.”(snip)
(snip)" NEW YORK (Reuters) - A deepening U.S. housing slump has caused an alarming surge in job losses at U.S. financial services companies, and the end is nowhere in sight, consulting firm Challenger, Gray & Christmas Inc. said on Tuesday.
The industry has announced 87,962 job cuts so far this year, 75 percent more than the 50,327 recorded for all of 2006, Challenger said. Nearly one-fourth of this year's cuts have been announced in August alone.
Of this year's cuts, 35,830, or 41 percent, were tied to housing market troubles, including riskier subprime mortgages. Job cuts by real estate and construction firms totaled 21,620, more than twice the number for all of 2006, Challenger said."(snip)
What does this really mean ? Well, basically, it's likely to mean that 150,000 relatively high paying white collar jobs in the financial industry, and in relatively high paying blue collar jobs in the home construction industry, will vanish by the end of the year. If you tack on resulting secondary job losses in housing related durable goods and appliances, in building materials, in furniture, hell even in home furnishing related retail, the number of unemployed is likely to be in the 200,000 ballpark if not higher.
Also, unlike previous layoffs in the airline industry, in the auto industry etc., workers in the housing related industries will NOT be getting generous buy-out offers or severance packages, will NOT be getting ongoing union health insurance coverage, etc. They'll be getting unemployment checks that won't come close to covering their own mortgage and car payments !
However, just like former auto industry workers, unemployed mortgage brokers etc. are going to find that the 'replacement jobs' which are available will pay far less than their former jobs. Like the decline of the auto industry, the decline of the mortgage banking and homebuilding industry will force thousands of formerly well paid workers to cut pack on their 'non-essential' spending ... which will translate into lower earnings potential for any Americans who dependent on these workers for their source of income ( yes this will mean exotic dancers, along with a host of other 'non-essential' service providers from Starbucks to Lexus dealers )
If you allow six months for the personal credit default cycle, the US economy in 2008 is going to be UGLY !!!



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