The subservicer moved to trim its staff "due to a reduction in the number of loans subserviced," the company wrote in an internal communication shared with National Mortgage News.

"Current market conditions impacting our industry, particularly the decisions made by some of our clients in response to notable increases in interest rates and the decrease in value of mortgage servicing rights…have necessitated the need for Dovenmuehle to make adjustments," the company, which is over 100 years old, wrote.

The layoff, which impacts the company's headquarters, goes into effect Feb. 16, 2024, according to a Worker Adjustment and Retraining Notification Act notice filed in Illinois. It is uncertain what positions were trimmed.

The subservicer does not "anticipate needing further reductions in workforce" going forward, it said in an email to employees on Dec. 15.

Donvenmuehle itself declined to comment, noting it does not share information on internal matters, including workforce details.

The company, founded in 1844, subservices portfolio loans, as well as loans sold to Fannie Mae, Freddie Mac, Ginnie Mae and the Federal Home Loan Bank with servicing retained.

Its proprietary technology "helps lenders reduce servicing costs and deliver consistently high levels of service to homeowners while maintaining compliance with investor and regulatory requirements," Dovenmuehle said on its website.

Elevated interest rates and low origination volume has hit all players in the mortgage ecosystem, spanning from technology companies, subservicers to mortgage shops. As a result, the industry has seen a flurry of reductions and company consolidations.

The tide may be turning, with the 30-year fixed rate mortgage slinking below 7%, in mid-December and mortgage application activity showing signs of revival.

"Given inflation continues to decelerate and the Federal Reserve Board's current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year," said Sam Khater, Freddie Mac's chief economist, commenting on rates dropping Dec. 14.