Bank of America Laying Off 400 from Mortgage Servicing Unit

By Chris Cumming June 24, 2013, 1:57 p.m. EDT 1 Min Read

B of A Forms Problem Home-Loan Unit, Exits Reverse Mortgages

The Charlotte banking company announced Friday the establishment of Legacy Asset Servicing to oversee the servicing of all defaulted residential mortgage loans and discontinued lending products.

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February 4
Consumer banking

U.S. Monitor Cites Banks for Mortgage Settlement Violations

The big five servicers technically passed the first test of their compliance with the $25 billion national mortgage settlement, but four of them failed to meet at least one requirement and the settlement's monitor received nearly 60,000 complaints.

By Kate Berry

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Bank of America (BAC) is laying off hundreds of workers from a unit that services troubled mortgages.

The bank will lay off 411 Dallas-area workers from its Legacy Asset Servicing unit, the company said Monday. The layoffs will take place Sept. 30 and the workers affected will be offered severance pay and benefits, it said.

Bank of America created Legacy Asset Servicing in 2011 as a repository for defaulted residential mortgages, many of them subprime loans originated by Countrywide, the home lender it purchased in 2008. The unit handles loan modifications and resolves repurchase claims.

In a statement, Bank of America said the layoffs follow "the successful reduction of our portfolio of delinquent mortgage customers." The bank noted that it has more than 26,000 employees in Texas.

Last week, the bank was cited for multiple violations of the 2012 national mortgage settlement struck between the five largest mortgage servicers and 49 states. Among the violations cited by the settlement's monitor was its failure to notify borrowers when it had initiated foreclosure proceedings.

Chris Cumming