PHH Mortgage Corp. is cutting 135 jobs in Amherst, but said it remains committed to a new building under construction in the town.
“We have reduced capacity in our mortgage business to align with lower industry-wide demand,” said Dico Akseraylian, a PHH spokesman.
Akseraylian said the affected employees “will receive 90 days of continued pay and benefits.” He did not answer a question about how many employees PHH’s local operation would still have after the layoffs.
News of the layoffs was disclosed when PHH filed a document with the state Department of Labor, which requires employers to give notice of mass layoffs. The notice said the layoffs would occur between late May and early July.
While PHH is preparing to reduce its local work force, work is moving forward on a new building in Amherst that PHH will lease.
“The construction on the new building will continue, and we remain committed to maintaining our presence in the Buffalo area,” Akseraylian said.
PHH is on track to move into the new building in early May, said Ronald George, chief financial officer for Zaepfel Development, which is building the facility.
The new building is in College Park on Wehrle Drive, and will consist of 97,000 square feet. The project is valued at $34 million, including equipment that will be installed. In the interim, PHH is leasing space at Northpointe Commerce Park.
The Amherst Industrial Development Agency in November 2012 approved a series of tax breaks worth $4.55 million for the expansion project, which also was granted $3 million in tax credits through the state’s Excelsior Jobs Program.
As for the PHH job cuts, George said: “They hope that this is just a short-term thing.”
Plans for PHH’s new facility were set in motion in May 2012 when HSBC Mortgage Corp. agreed to transfer its retail mortgage processing and servicing business to PHH. HSBC has retained ownership of the loans; HSBC is paying fees to PHH for providing services.
HSBC had handled the work out of a facility at Walden Avenue and Dick Road in Depew. But HSBC has other operations there, and the bank moved some of its employees to the Depew site after it vacated the downtown tower formerly called One HSBC Center. PHH opted to move the work it acquired to a building of its own, and settled on the new site on Wehrle Drive in Amherst.
With the Mortgage Bankers of America predicting that new home loans could fall by as much as a third this year, to their lowest level since 2000, the company also is taking “decisive action” in response to the challenging market conditions, PHH Corp. chief executive Glen A. Messina told investors during a conference call last week. The parent company said it met its goal of cutting costs by at least $60 million last year, and it expects its cost-cutting total to rise to $110 million by the end of this year.
PHH executives also said last week the company is considering the sale of its mortgage business or its auto fleet business – or both – with a decision expected by the end of June.