Posted on August 03, 2022
Non-QM lender Kiavi, which specializes in fix-and-flip and investor loans, has laid off 39 employees, sources told HousingWire on Thursday.
An email sent to employees on Wednesday morning said Kiavi reduced the size of the firm by about 7% “to reduce our cost structure and protect the financial health of the company.” Kavi has more than 300 employees, according to the firm’s website.
“We were and are still doing so well,” an employee who requested anonymity 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.”
Of the 39 employees laid off, 12 cuts hit the human resources team. Cuts also hit operations, risk and compliance, legal, finance, business operations, and marketing teams, according to a presentation held on Wednesday afternoon.
Employees will be terminated on Friday, July 15. They will receive 12 weeks of severance payment, according to the employee.
Kavi, founded in 2013 and led by CEO Michael Bourque, expanded to three states in June and now 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, which was expected to provide capital to support 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 and forced Kiavi to issue pink slips.
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