For at least the second time in less than six months,Bank of America (BAC) is set to lay off hundreds of workers from its legacy mortgage servicing operations as the bank continues to cut back its servicing staff due to a decline in delinquent loans.
According to a report from The Daily Press, Bank of America is preparing to lay off 202 employees from its Norfolk, VA legacy asset servicing unit as it scales back its staff to “normal levels.”
From the Daily Press report:
In 2011, Charlotte, N.C.-headquartered Bank of America created a division specializing in assisting mortgage customers who were at risk of foreclosure or defaulting on their home loans, spokeswoman Jumana Bauwens said in an emailed statement. The number of delinquent mortgage loans has since dropped to "one-seventh of their peak levels."
"Now, we are in the process of returning to normal staffing levels," Bauwens continued.
The Norfolk job cuts mark the second time that Bank of America has laid off employees in its mortgage servicing department in recent months. In October, HousingWire reported that BofA laid off 187 employees from its Plano, Texas offices.
When contacted about those layoffs, Bauwens told HousingWire that the bank has made “significant progress” in helping delinquent homeowners.
“The number of delinquent mortgage loans we service has decreased to one-fifth of their peak levels,” Bauwens told HousingWire in October. “Due to the lower demand for these specialized services, we are reducing the size of the operations. This division was created in 2011 and staffing grew dramatically to support the short-term needs of mortgage customers at risk of foreclosure. Now, we are in the process of returning to normal staffing levels.”
According to the Daily Press report, Bauwens said that Bank of America’s legacy asset servicing division had 15,800 employees in the fourth quarter of 2014. That’s down from a peak of 42,000 in 2012.
In June 2014, the Charlotte Business Journal reported that BofA laid off 540 employees in its legacy asset servicing unit.
"It's a really difficult message because the fact that we've cut the need for that support thanks to these efforts and an improving economy is a good sign for our company and the customer," BofA spokesman Dan Frahm told the Charlotte Business Journal. "But for our employees who have worked so hard to help those customers, this is tough.”