The COVID-19 pandemic has caused Angel Oak Mortgage Solutions to cut 70% of its staff due to a significant slow in the non-qualified mortgage (Non-QM) business. This effectively cuts nearly 200 of the company's 275 workers, according to Bloomberg.
"The world has dramatically changed. We have to slow down and re-underwrite in the new world that we’re in. That’s going to take some time," said Sreeni Prabhu, co-chief executive officer of the firm’s parent, Angel Oak Cos, according to the report.
The company previously revealed that it was pausing all originations of loans for two weeks, due to the evolving risks and inability to evaluate credit risks. With these cuts, Angel Oak will have a hard time once it returns to the market.
"A near shutdown of economic activity across the country has caused severe pain across the $16 trillion U.S. mortgage industry," according to the report.
"The home-loan market that played a central role in the last financial crisis has been roiled anew as lenders brace for a growing slate of soured obligations and struggle to obtain financing to issue new loans."
To learn more about Angel Oak's decision to eliminate 70% of its staff, click here.