Bank of America to Eliminate up to 4,000 Mortgage Jobs

Bank of America mortgage unit layoffs
Spencer Platt/Getty Images
By Peter Rudegeair

Bank of America said Thursday that it was cutting up to 4,000 mortgage jobs as fewer borrowers refinance, and fewer home loans go bad.

The layoffs are the latest round of job cuts at major banks as rising mortgage rates cut into demand for refinancing home loans. Wells Fargo (WFC), JPMorgan Chase (JPM) and Citigroup (C) have announced thousands of layoffs among them in recent months.

At Bank of America (BAC), the third largest U.S. mortgage lender, about 1,200 employees were notified this week that they would be terminated. Most were full-time workers in the division that processes new mortgages, a spokesman said.

Before the end of the year, the bank is looking to cut another 2,800 jobs in the division that collects payments from borrowers who are behind, a spokesperson added. Most of the layoffs in that division will affect contractors.

Five years after the financial crisis, many of the loans that should never have been made have already gone bad, leaving banks with fewer troubled loans to manage.

For Bank of America, mortgage loans that were delinquent by more than 60 days fell by 94,000 to 398,000 in the third quarter. The bank expects a further decline to below 375,000 by the end of 2013.

Mortgage lending volume at Bank of America was down 11 percent in the third quarter from the second quarter.
The number of applications the bank had received but not yet processed was down 60 percent in the end of September from the end of June.

The bank expects to make fewer home loans in the fourth quarter and will look to cut more mortgage jobs, Chief Executive Officer Brian Moynihan said during an Oct. 16 quarterly conference call with analysts.

The job cuts at the bank follow another round of layoffs -- in the third quarter, the second-largest U.S. bank eliminated more than 9,000 full-time positions, or 3.6 percent of its total staff.

Finance chief Bruce Thompson said on the Oct. 16 call that the reductions were concentrated in the unit that collects payments on home loans, the unit that makes new home loans, and in many of the bank's branches.

A majority of the latest cuts will affect employees based in California, Texas and Florida.

News of the layoffs was first reported by the Wall Street Journal.

Higher Rates Slow Refinancing

Rising interest rates have weighed on mortgage refinancing at banks since the spring. The average interest rate on a prime 30-year mortgage stood at 4.39 percent in the week that ended Friday, according to the Mortgage Bankers Association, down from a high of 4.80 percent in September but above the 3.59 percent rate in early May.

With rates having recently come down from their September highs, demand for refinancing has increased by one third, and overall mortgage applications are up by 18 percent, according to MBA data. But even with that pick-up, applications are down by 52 percent from their level in early May.

With these declines, Wells Fargo, the largest U.S. mortgage lender, said on Oct. 17 that it was cutting 925 mortgage jobs. That is in addition to the 5,300 Wells Fargo mortgage employees who were notified that they would be laid off in the third quarter.

Bank of America was the third-largest U.S. mortgage lender in the first six months of 2013, making 5.2 percent of all U.S. home loans, following JPMorgan Chase, according to Inside Mortgage Finance, an industry publication.

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Good; maybe they\'ll STOP calling to ask me to refinance, then! Sick of those calls!

October 25 2013 at 5:32 AM Report abuse rate up rate down Reply

Obama..... Keeps saying things are getting Better... ya they are for him and His crook Democrats running the country and trying to blame it on the Republicans!!! Obama=Failure

October 24 2013 at 11:55 PM Report abuse +1 rate up rate down Reply
1 reply to hunglow5569887's comment

Wake up. Your watching Fox News again. They're liars also. The Republican Party is over.

October 25 2013 at 4:14 AM Report abuse -1 rate up rate down Reply
1 reply to audioknot1's comment

Yeah, why would people want to know the truth when they can be brainwashed by the news media and Jay Carney?

October 25 2013 at 6:22 AM Report abuse rate up rate down
fred mosrie

is it 3000 jobs or 1200??????????????????

October 24 2013 at 11:19 PM Report abuse rate up rate down Reply

finally put together enough to avoid foreclosure, i called BOA 's attorney and they wanted to stick me for 7500.00 in fee's before they even filed doc's at the court, real nice people. So after a few times going back and forth Boa finally got smart and waived all the fee's and made it feasible for me to get current on my loan. Some genius figured out that by doing so on tons of delinquent mortgages they can save tons in labor, that explains this article on job elimination.

October 24 2013 at 10:46 PM Report abuse rate up rate down Reply
Bill Gemlin

aleays blame the repub then the hope and change person in the white house that just bails them out and raise the debt

October 24 2013 at 10:17 PM Report abuse rate up rate down Reply

B of A is full of BS

October 24 2013 at 9:20 PM Report abuse +1 rate up rate down Reply

America will fall like Rome

October 24 2013 at 9:05 PM Report abuse +3 rate up rate down Reply
1 reply to emberson7's comment

It has already started

October 24 2013 at 10:14 PM Report abuse +1 rate up rate down Reply
3 replies to ectullis's comment

OR are they only cutting 1500 of the 3000 auto signing machine??

October 24 2013 at 7:56 PM Report abuse rate up rate down Reply

that only means you'll wait longer for someone to lie to you

October 24 2013 at 7:30 PM Report abuse rate up rate down Reply

ONLY 398K Delinquent.. OMG the Economy has really turned that corner!!!

October 24 2013 at 7:28 PM Report abuse +3 rate up rate down Reply
1 reply to rmrmsix's comment

Ya thats what Obama, Pelosi, Reid trying to tell people!!!!!!!! lol Big Liar\'s.....

October 24 2013 at 11:53 PM Report abuse +1 rate up rate down Reply