The Fix-And-Flip Lender Eliminated 39 Positions To Ensure It Can Survive Through 2023
An email sent to employees on Wednesday morning said Kiavi wanted to, “reduce our cost structure and protect the financial health of the company.”
Kiavi’s website says the company has more than 300 employees.
An anonymous employee told HousingWire:
The problem is we’re not backed by the government sponsored enterprises (GSEs). Because we are in the hard money space, we don’t have a lot of investors willing to buy our assets because of the rate hikes, is what our CEO told us.
The company laid off staff within it’s operations and risk and compliance departments. It also laid people off from it’s legal and finance teams. In addition Kiavi also laid off people from its business operations and marketing teams.
The company announced employees will also receive a 12 weeks of severance payment.
Kiavi operates in 32 states and Washington, D.C. The company closed on a $218 million private-label securitization of residential transition loans (RTLs) in June. The deal was expected to provide capital for about $750 million in loan originations over the life of the deal. The lender was planning to offer construction loans but rising interest rates put a halt to that.
However, a spokesperson for Kiavi did not return requests for comment.
Kiavi, which rebranded from Lending Home in November, ranked as the top short-term lender in the fix-and-flip space in 2021, with $2.7 billion in originations, up about 78% from 2020, according to a recent report by Inside Mortgage Finance (IMF).