Blame BofA layoffs on falling refi volumes
Ohio staffing reduction shows mortgage industry in flux
As the mortgage refinance boom continues to reverse course, Bank of America (BAC) is falling in line with other lenders by cutting more than 1,000 jobs in home loan fulfillment and consumer banking services.
Bank of America spokesperson Jumana Bauwens confirmed the company’s impending layoff Friday.
"We continue to reduce the size of our mortgage servicing operations in line with the successful reduction of our portfolio of delinquent mortgage customers," Bank of America said in a statement.
Bank of America currently has fewer than one-third the amount of customers needed to support current levels of specialized support teams and services.
Additionally, the actions reflect ongoing efforts to keep up with market realities, including declining refinance volumes as interest rates tick up.
"Bank of America has a strong track record for helping our employees identify opportunities both inside and outside of the bank and we are working closely with leaders in the community to support a smooth transition," BofA executives said.
They concluded, "We remain committed to Ohio and continue to refine our business model to account for changes in the marketplace to both preserve our presence and plan for the future."
BofA is not alone in this transition. As demand for loan servicing falls and the originations market becomes purchase-heavy, banks are caught trying to build new streams of revenue while simultaneously getting rid of services now in low demand.
Wells Fargo recently announced 763 mortgage-related layoffs. JPMorgan Chase (JPM) wasn't far behind, cutting more than a thousands jobs combined in Florence, S.C., and San Diego. Falling demand for loan servicing prompted those cuts as well.
Back in February, JPMorgan said a series of cuts over the course of the next year would lead to 13,000 to 15,000 layoffs.