New York Community Bank, the parent of Ohio Savings, will slash more than 200 jobs in Greater Cleveland next month when it gets out of the mortgage business.
The New York-based bank, which bought Ohio Savings/Amtrust after it failed in 2009, said last week it would sell its mortgage business to Freedom Mortgage of New York. But it initially declined to discuss how many jobs would be affected.
In a notice to the state this week under a required Worker Adjustment and Retraining Notification Act, NYCB said it plans to eliminate 210 mortgage-related jobs, based out of the bank's Cleveland headquarters at 1801 E. 9th St. in Cleveland. It's also laying off 14 people in customer service or personal banking who work at the bank's office at 7570 Northcliff Ave. in Brooklyn.
The layoffs are effective Sept. 29, the end of the third quarter.
"Our presence in Ohio is an important component of our business strategy and following the close of the transaction, we will continue to have 28 branches and more than 400 employees in the state," spokeswoman Donna Winfield said last week. "We look forward to continuing to grow NYCB's position as one of the 25 largest banks in the country."
Freedom said it plans to hire "select employees in organizations, servicing and operations from New York Community Bank's Cleveland-based residential mortgage operation."
It did not indicate how many people may be hired.
Charles Bromley, a veteran advocate of consumer issues including fair lending in Ohio, said it "will be interesting" to see how the bank meets community credit needs.
"Mostly I'm disappointed," Bromley said. "I thought they were supposed to be lenders. Same story -- lots of deposits, no loans."
Ohio Savings is the 11th-largest bank in Greater Cleveland by deposits, with $1.7 billion in local deposits, amounting to 2.6 percent of local market share. Before the financial/ mortgage crisis that squashed dozens of big lenders like Amtrust/Ohio Savings starting in 2007, it was the third-largest bank in Greater Cleveland.
Bromley said the financial problems aren't over for NYCB.
"If you look at their stock, it's way down," he said. "They obviously needed some cash. The bid for a Astoria bank did not happen it cost them a lot of money. They have received consistently low CRA ratings."
Winfield said Ohio Savings expected to "maintain CRA activity at current levels in alignment with our continuing commitment to this community."
Freedom, which is a privately owned lender, is buying about $500 million in mortgages from NYCB. The deal includes the servicing rights for $20 billion in mortgages.
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