Oct 24 Bank of America Corp is looking
to cut 3,000 mortgage jobs before the end of the year to cope
with declines in refinancing and in its portfolio of delinquent
home loans, according to the Wall Street Journal.
About 1,200 mortgage employees received notice that their
position would be eliminated on Thursday, the newspaper said,
citing people familiar with the matter. A majority of the 3,000
cuts will come from temporary contractors, though full-time
employees will also be laid off, the newspaper said.
A Bank of America spokesman did not immediately respond to a
request for comment.
The second-largest U.S. bank laid off more than 9,000
full-time employees in the third quarter. Finance chief Bruce
Thompson said on an Oct. 16 conference call with analysts that
the reductions were concentrated in the unit that collects
payments on current and delinquent home loans, the unit that
makes new home loans, and in many of the bank's branches.
Bank of America made $22.6 billion in home loans in the
third quarter, down 11 percent from the second quarter.
The number of mortgage applications the bank had
received but not yet processed fell 60 percent from the end of
June to the end of September.
Additionally, mortgage loans that were delinquent by more
than 60 days fell by 94,000 to 398,000 in the third quarter. The
bank expects delinquent loans to be below 375,000 by the end of
Rising interest rates have curtailed customers' demand to
refinance their mortgage since the spring. The interest rate on
a 30-year mortgage stood at 4.39 percent in the week ending Oct.
18, 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.
Bank of America expects to make fewer home loans in the
fourth quarter and will look to cut more mortgage jobs, chief
executive Brian Moynihan said on the conference call.
The Charlotte, North Carolina-based bank is not the only
lender to lay off staff in response to a slowdown in
refinancing. Wells Fargo & Co, the largest U.S. mortgage
lender, said on Oct. 17 it is cutting 925 mortgage jobs.
That comes on top of the 5,300 Wells Fargo
mortgage employees that were notified that they would be laid
off in the third quarter.