The loan servicing branch of Security National, the flagship firm of Eureka businessman Rob Arkley, announced today that it will be laying off 49 employees, 31 of whom work at the company's Eureka headquarters.
The "reduction in force" is necessary, the company explained in a press release, because a contract with "a large national financial institution" is about to expire.
Security National Servicing Corporation has been hit hard by the housing market's perilous plunge -- or, more specifically, by the collapsed value of mortgage-backed debt, SNSC's stock-in-trade. Three years ago the company laid off 31 workers (21 from Eureka), citing "turbulent economic times." Last year the Federal Deposit Insurance Corporation investigated the abrupt closure of an Arkley-owned bank in Louisiana, and Bank of America sued Arkley and his wife personally for $50 million. (Both cases have since been resolved amicably.)
[Note: A previous version of this post incorrectly listed the total layoffs as 41.]
Arkley recently bragged that he's the last man standing in his industry, which has been virtually obliterated under the weight of foreclosures nationwide. Ron Williams, chief operating officer of SNSC, said in the release that there just aren't enough home loans around to be serviced these days -- at least not the big groups of 'em that the company likes to buy off of big banks.
This is how he phrased it: "While we have seen conditions improve in our Commercial Real Estate and Insurance divisions, our third-party servicing portfolio continues to be affected by reduced volumes of home loan originations and whole loan trading activities due to current market conditions."
The press release strikes an optimistic tone, noting that the company is in negotiations with several large financial institutions to assume new mortgage portfolios. However, most analysts have been saying that the immediate outlook for the housing market is not so good.