The long rumored ‘mega’ layoff at Bank of America’s mortgage unit has begun.
Friday morning, during its first quarter conference call, the company confirmed that due to declining mortgage applications it is firing 2,000 contractors and laying off 1,200 staffers for a total of 3,200 workers.
Most of those let go are loan processors and underwriters but late in the day a spokeswoman told National Mortgage News that “some” were loan officers.
In total, the cuts affect 1,500 full timers, but the bank said 300 “associates” will be redeployed in its newly formed Legacy Asset Servicing division, which manages troubled loans at the old Countrywide Home Loans franchise. (B of A bought Countrywide’s parent in August 2008.)
Overall, the bank is shuttering half of its 200 small loan fulfillment centers across the country, including 27 in California.
In a follow-up statement to the earnings call B of A said the cuts are “in response to an expected 25 percent downturn in the national mortgage origination market this year.”
But to some in the industry the cuts are just the latest step in the megabank’s long slow decline in mortgage banking. This past fall it closed its once dominant wholesale division. Among all home funders, B of A ranks second nationwide.
B of A is not alone in the shedding of mortgage workers. Last week Wells confirmed that it was cutting 1,900 workers, but said few of those were LOs.
Industry-wide, loan production is expected to fall to $1.1 trillion this year from $1.6 trillion last year. In the first quarter the bank’s home fundings fell to $56.7 billion from $84.7 billion in 4Q.
