Pennymac is closing its Franklin, Tennessee, branch and laying off staff within its consumer direct lending operations as a result of macroeconomic conditions, the lender confirmed Tuesday.

"Given the current market environment and following a careful review of our staffing needs, Pennymac has made the difficult decision to close its Franklin, Tennessee, site and reduce the associated positions within our consumer direct lending operations," a company spokesperson told National Mortgage News. 

The office didn't have a support staff, but dozens of loan officers were laid off. This did not come as a complete surprise, The Mortgage Scoop reported, as Pennymac transitioned the entire office to remote work earlier this month and leads fell from about 12 a day to 4-5 in recent months.

Pennymac was one of the first major lenders to announce layoffs this year. Summit Funding eliminated 163 positions across the company in March following a merger agreement with CrossCountry Mortgage.

"Affected team members are being offered severance, and we have extended opportunities to remain with the company to a number of impacted colleagues," the spokesperson said. "We are grateful for their contributions and are committed to supporting them through this transition."

Workers who remain with the company will be reporting remotely to its new hub in Carrollton, Texas, The Mortgage Scoop reported. The office opened its doors in December and will eventually create 1,800 jobs, Pennymac announced at the time.

"Our new location in Carrollton is a direct result of our commitment to our people and our belief in the future of our industry," Pennymac Chief Production Operations Officer Paul Szymanski said in a press release. "Through this investment in a best-in-class facility and access to the exceptional talent in the Dallas-Fort Worth area, we will drive growth for Pennymac."

The lender now has 10 active sales and servicing locations, half of which are located in either California or Texas.

Pennymac missed expectations in each of the last two quarters, in large part due to a drop off in servicing, perhaps contributing to the lender's decision to close the Tennessee office. Servicing pretax income came in at $12.7 million in the first quarter, significantly lower than the $37.3 million recorded in the fourth quarter of 2025 and the $76 million posted in the first quarter last year.

The lender plans to improve its servicing platform and expand its artificial intelligence use, announcing a partnership with Amazon Web Services last week. The proprietary virtual assistant, developed around speech-to-speech technology offered by Amazon Nova Sonic software, can speak to customers at any time by phone with real-time responses that can identify loan options, schedule callbacks and deliver application links, according to a press release.