Among those attending last week’s New England Mortgage Banking Conference in Rhode Island were Jay Cox, president, and Bill Scherer, vice president, of Massachusetts-based Commonwealth Mortgage Lending. Cox is based in Westborough and Scherer is based in South Boston.

At 6:50 a.m. on Aug. 16, Ginny Cavalet woke up to an e-mail from her employer, First Magnus Financial, announcing that the company had shut down.

“I e-mailed [a supervisor] to ask if it was just the correspondent lending division,” she recalled. “She said, ‘No, it’s the whole company.'”

Cavalet, who had worked for the Arizona-based national lender for less than a year as its Northeast regional sales manager for correspondent lending, scrambled to try to place loans the company had committed to somewhere else.

“I called all my lenders and I sent out a nice e-mail to anybody that had loans in the pipeline,” she said. “I helped a couple of people place loans with other investors.”

By noon, her e-mail had been shut down. Less than a week later, the company, which specialized in Alternative-A loans – which fall somewhere between prime and subprime mortgages – filed for Chapter 11 bankruptcy protection.

Cavalet, a 23-year mortgage industry veteran and the single mother of a college-age daughter, found herself without her last paycheck and looking for a job.

“I would wait this out longer, but they didn’t even keep our insurance on for 30 days,” she said. “I’ve never been uninsured in my life.”

She may not even be eligible for protection under COBRA, the federal law allowing laid-off employees to continue to get health insurance benefits through their companies for 18 months. Many companies that have gone bankrupt are exempt from having to offer the benefit.

Cavalet, who was signed up to attend the New England Mortgage Bankers Conference in Providence, R.I., last week as an exhibitor for First Magnus, found herself a guest at the conference’s hastily arranged job fair instead. The event is held annually by the Massachusetts Mortgage Bankers Association, but this is the first time a job fair has been included in the offerings.

Cavalet said she’s closing in on a sales position with a commercial insurance company at half her former base salary (which she wouldn’t divulge), but she told the prospective employer she would be at NEMBC, hoping to latch onto a job in the troubled mortgage arena. Cavalet traveled from her home in West Virginia to be in attendance.

“A switch [in industries] is a little frightening,” she said.

Paralyzing Worry

Ericka Monte, another job seeker at last week’s conference, was just beginning her vacation in late July when she saw the stock market drop 500 points in two days. That, to her, was the signal that her company might be in trouble.

“I knew it wasn’t good,” said Monte, who works in the East Providence, R.I., office of Option One Mortgage Corp. “I actually canceled all my vacation plans.”

Her foresight helped her save some money for tough times ahead, as her office and 22 other Option One locations across the country will be shutting down on Sept. 28, Monte said. Only three will remain, with two in Orlando, Fla., and one in Irvine, Calif., she said.

Monte said she has been at Option One for more than three years, after spending six years working at First Federal Savings Bank of America’s Swansea office. There, she reviewed loan files for compliance with the requirements to sell those loans to the Federal Housing Administration, she said.

When Waterbury, Conn.-based Webster Bank purchased First Federal in 2004, Monte moved over to Option One. Walking among the company booths at the job fair Thursday, Monte said she is thinking about trying to find work with a bank again.

“I think it’s in my best interest to go back to a bank for stability,” Monte said.

While the mortgage market is having trouble unlike she has ever seen, Monte said she understands the business is cyclical.

“We’re at the lowest of the lows right now, but people still need mortgages,” she said.

As she scoped out opportunities at the job fair, Monte said her friends in the industry are nervous that they, too, might soon be looking for work.

“We’re waiting to see who is going to be a survivor, and who isn’t,” she said.

But despite local industry estimates of a minimum of 4,000 jobs lost in New England in the wake of the subprime mortgage crisis, Monte and Cavalet were among what Lisa Donlan Arthur, a regional sales recruiter for First Horizon Home Loan Corp. in Hyannis, estimated to be fewer than 100 job-seekers in attendance at the job fair.

“We thought this would be a big draw,” said Shelly A. Akatzyszewski, owner and president of SARA Mortgage & Financial LLC, a loan processing company in Hollis, N.H. “But there aren’t a lot of people coming through.” First Horizon and SARA Mortgage were among the approximately three dozen vendors at the fair seeking new employees. Prospective employers were given table space with no additional cost beyond the event registration fee.

Debbie Moore, a senior vice president at Florida Capital Bank Mortgage in Jacksonville, Fla., said her bank’s wholesale division wants to expand its lending presence in Massachusetts and is hiring originators at a small base salary plus commission. Now, she said, is a good time for companies seeking to hire because there are a lot of experienced people looking for work. But the job fair turnout was “disappointing,” she said.

“I would think a lot of people would be getting out of the industry,” said Brad Black, a vice president at First New England Mortgage, a Newton brokerage that was hiring commission-based originators, speculating on the reason his company had received just one resume halfway through the job fair.

Also, those who are still employed but worried about their jobs would probably be reluctant to attend a job fair at a conference where they could run into a friend of their boss – especially in today’s market, Black suggested.

A closing attorney at the event, who did not want to give his name, said he understands why people are nervous.

The attorney said he lost his job with a national title company three weeks ago and had just found employment again Thursday morning before visiting the job fair. The layoffs at his prior company came in waves beginning in late June, he said. He had been working in the company’s Rhode Island office for two years, and moved to a Massachusetts location earlier this summer in an effort to keep his employment.

Ultimately, the move did not help him, since he lost his job anyway, the attorney said.

Two more waves of layoffs have swept through the title company in the weeks since, he added. His friends still working there are concerned about their own job security.

“They’re scared,” the attorney said. “They’re worried they will be the next to go. While it is understandable, that nervousness undercuts your work. Worrying paralyzes you, and you’re not able to do your job. You can’t control these things. You can only try to serve your clients the best you can.”

Asked if the market turmoil makes people consider careers in other fields, he answered, “You do. But how many jobs are recession-proof? It’s better to do something you enjoy.”

The downturn in the market means the people who stay are the ones who really like what they’re doing, he said.

‘A Nice Little Deal’

Cavalet said that when the First Magnus layoffs happened, an account executive she supervised was “crushed.”

“But I told her, ‘I reared my daughter on my own from age 1 to college,'” she recalled. She told the woman that she knew she had the ability to get through tough times and find another job. The account executive recently interviewed for a sales job with cigarette manufacturer Philip Morris. A regional sales manager Cavalet worked with has returned to cosmetology school.

Tracy Aylward, who has been in the mortgage business 15 years and most recently was laid off in March, when Option One, a subsidiary of H & R Block Mortgage, closed the Burlington branch office where she was a sales manager. She still is optimistic about her own chances to continue in the industry, she said, but a few of her colleagues have gotten out of the business; one is now learning to be a hairdresser.

However, industry layoffs may help Paula J. Byers wind up where she began.

For several years, Byers ran her own loan processing company in Hudson, N.H., aptly named The Processing Department. She did the work on a contract basis, handling all the documentation for loan files and serving as a conduit between multiple brokers and multiple lenders.

“It was a strong run for quite a while,” Byers said. “I had a nice little deal for a few years.”

But in 2006, “things were really slowing down,” Byers said. In fact, business had slowed to the point where she dissolved her company, she said.

She opted to use her skills working for someone else, and thought she had found stability when she landed a job at Middletown, Conn.-based Mortgage Lenders Network USA. The work was similar to what she had done before, except now she was working with just one lender, MLN.

But her stint there lasted less than a year. MLN declared bankruptcy in February, leaving Byers to look for work again.

Knee surgery postponed her job hunt until June, and by then the market had become even tougher. Byers would interview with companies, only to find out within a matter of days that they were no longer in business, she said.

But as mortgage companies make deep cuts into their own personnel, Byers said that she believes it could potentially recreate the need for an independent contractor like her former company.

“I’ve got my feelers out,” she said.