Blacknbengal
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Mortgage mess claims new victims
Bracing for a flood of layoffs: The 21,000 job cuts this month in the housing and finance industries almost equal the number for all of 2006.
Just a few years ago, mortgage salesman Terry Orlowski rode the housing boom and a six-figure income down to the car dealership and bought a new Audi A6.
Now, the soaring market and the fast car are gone. Last week he lost his job, along with 6,000 other employees of First Magnus Financial, a mortgage lender. Now driving a 1999 Dodge Grand Caravan, he plans to move back in temporarily with his ex so their two children can stay in private school.
"My first thought was this was one of the bigger companies. No one is safe," Orlowski says.
The flood of layoffs -? some 21,000 since the beginning of the month in the real-estate, construction and mortgage-lending industries -? is one way the Federal Reserve can see real impact on the economy from the turmoil in the markets.
It's not just guys in hard hats looking for work; it's also white-collar workers.
Many of these jobs in finance and real estate are relatively high-paying, which has helped car dealerships and high-end retailers. To be sure, all sorts of jobs are affected, because when a house changes hands, a small army of brokers, appraisers, pest-control inspectors, title searchers and lawyers send out invoices.
"Unlike a lot of other businesses, real estate is everywhere," says economist Bob Brusca of Fact & Opinion Economics in New York. "Even if this turns out to be small potatoes in one place, it has a fairly big impact."
A simple real estate transaction can involve up to 20 people, says Steve Walsh, president of Scout Mortgage in Scottsdale, Ariz. "An escrow officer may make $1,000, the county recorder gets a few hundred, the appraiser makes $300 to $400, the termite man $50 to $100 and there are movers and landscapers and decorators."
Walsh says his accountant told him of some real-estate agents who had been making $200,000 a year but are down to a $15,000 income. He says his firm, with business down 40%, has cut staff, too.
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Bracing for a flood of layoffs: The 21,000 job cuts this month in the housing and finance industries almost equal the number for all of 2006.
Just a few years ago, mortgage salesman Terry Orlowski rode the housing boom and a six-figure income down to the car dealership and bought a new Audi A6.
Now, the soaring market and the fast car are gone. Last week he lost his job, along with 6,000 other employees of First Magnus Financial, a mortgage lender. Now driving a 1999 Dodge Grand Caravan, he plans to move back in temporarily with his ex so their two children can stay in private school.
"My first thought was this was one of the bigger companies. No one is safe," Orlowski says.
The flood of layoffs -? some 21,000 since the beginning of the month in the real-estate, construction and mortgage-lending industries -? is one way the Federal Reserve can see real impact on the economy from the turmoil in the markets.
It's not just guys in hard hats looking for work; it's also white-collar workers.
Many of these jobs in finance and real estate are relatively high-paying, which has helped car dealerships and high-end retailers. To be sure, all sorts of jobs are affected, because when a house changes hands, a small army of brokers, appraisers, pest-control inspectors, title searchers and lawyers send out invoices.
"Unlike a lot of other businesses, real estate is everywhere," says economist Bob Brusca of Fact & Opinion Economics in New York. "Even if this turns out to be small potatoes in one place, it has a fairly big impact."
A simple real estate transaction can involve up to 20 people, says Steve Walsh, president of Scout Mortgage in Scottsdale, Ariz. "An escrow officer may make $1,000, the county recorder gets a few hundred, the appraiser makes $300 to $400, the termite man $50 to $100 and there are movers and landscapers and decorators."
Walsh says his accountant told him of some real-estate agents who had been making $200,000 a year but are down to a $15,000 income. He says his firm, with business down 40%, has cut staff, too.
Rest of Story
