THE STORY SO FAR
Last week, AJC reporter Arielle Kass wrote about the increasing number of people interested in becoming real estate agents as the local housing market improves. Today, she looks at an opposite trend in the residential turnaround — job losses for foreclosure attorneys and other employees who found work from the housing bust.
Brian Goldberg expected to finally get the pay bump he had been promised when he was called into a managing partner’s office at the law firm Pendergast and Associates.
Instead, he lost his job.
“I heard things had been slowing down, but my work hadn’t slowed down,” said Goldberg, a foreclosure attorney. “On the one side, I’m very, very happy the economy is coming back. … I can’t be disappointed about that. But my career is on the opposite end of the spectrum.”
People such as Goldberg, who found jobs that depended on a bad housing market and a slow economy, are losing them as home prices rise, foreclosures fall and the market picks up.
Several metro Atlanta law firms have laid off foreclosure attorneys and their support staff. Hedge funds and other investors who bought houses by the thousands no longer need workers to bid on foreclosed property, or inspect potential purchases. And bank employees who have done workouts or processed refinancings are being let go as demand for those activities slips.
To be sure, an improving housing market is good for metro Atlanta as a whole. New home construction is up, adding jobs. Rising housing prices make people feel wealthier, and more willing to spend.
But the good news isn’t good for everyone.
“The recovery made jobs that were built on repairing the damage done in the recession. Some of those jobs change as the economy shifts to a different footing,” said John Challenger, CEO of the global outplacement firm Challenger, Gray & Christmas. “People do transition to other kinds of jobs. Most skill sets are not so tightly defined that they can’t move to other areas.”
After losing his job in January, Goldberg found work as a law clerk at the real estate firm Dickenson Gilroy. But that job has also ended, and he is now hoping to transition to intellectual property law, a field he hopes will stay strong in a better economy.
Lee Budden, a Realtor who found homes for investor groups the American Home and Silver Bay, lived off his savings for six months when his services there were no longer needed. He finally started a construction company doing rehab work, he said, while also pursuing other hedge funds and transitioning his business back to mainstream real estate.
And Rob Stowe, who scoped out homes and bid for Silver Bay at foreclosure auctions for $50 an hour, has gone back to his job as a commercial land agent at ERA Sunrise Realty in Canton.
“Bidders like me, they didn’t have anything for us to go look at anymore,” Stowe said. “A couple years ago, when we were mired in the recession, it was pretty handy to have that.”
The American Home no longer has an acquisition team, CEO Aaron Edelheit said. The Atlanta company is hiring maintenance workers to keep its rental properties in shape, but as the company has gotten more efficient and stopped buying new homes, it employs fewer people.
Good employees have transferable skills, Edelheit said, and some whose jobs have been eliminated have stayed on with the company. He thinks it’s to metro Atlanta’s benefit to move through foreclosures as quickly as possible.
“The impact of a recovering housing market widely outweighs any loss of jobs,” Edelheit said.
At the Atlanta law firm Rubin Lublin, managing partner Glen Rubin said a “significant reduction” in the amount of mortgage defaults led the firm to lay off between 10 and 15 percent of its staff last month — about three attorneys and 12 members of the support staff. Metro Atlanta foreclosure notices were down 50 percent for the first three months of 2014 compared to the first quarter of the previous year, to levels unseen since 2002, according to data from Equity Depot.
SunTrust, based in Atlanta, announced in October that it would cut 800 mortgage positions across the country because refinancing activity is down. That was on top of 100 mortgage positions that were cut earlier in the year. Other big banks have made similar announcements, laying off thousands of employees.
“As a company, we’re definitely seeing the trend,” Bank of America spokesman Matthew Daly said. “Refinancings, foreclosures — those things are fading away.”
By the end of February, financial companies had announced plans to cut more than 14,000 jobs, according to Challenger’s data. Banks that added staff to deal with foreclosures and troubled assets no longer needed those workers as the problems eased.
Some former mortgage bankers are finding jobs in sales, said Macon Albertson, senior vice president of the Northeast and Southeast for Randstad Professionals, a staffing company. Others are staying in finance, while there are plenty who are just out of work.
“It’s no different than real estate agents,” Albertson said. “They had to go find a new career.”
Many who were laid off, Albertson said, were doing subprime lending and were still early in their careers. Because they don’t have decades of experience, he said, they should have ample opportunities to re-establish themselves.
Still, he said, it can be “a tough road.”
“The bubble for selling houses was followed by a bubble of foreclosures,” he said. “Companies that built their businesses around serving bubbles absolutely have paid the price.”
Goldberg, the laid-off attorney, said there are always a loser and a winner when it comes to the law. He’s on the losing side now, but hopes a new opportunity will soon put him with the winners.
“I’m trying to be optimistic and look at it that way,” he said. “Without a job, it’s difficult to do that.”
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