Bank of America is cutting about 1,300 more jobs in its mortgage division as the firm adjusts to lower demand, said two people with direct knowledge of the plans.
Affected employees were told yesterday about the cuts, which mostly involve the Charlotte, North Carolina-based firm's home-loan fulfillment workers, said the people, who asked for anonymity because the changes are private.
The latest round of reductions means Bank of America will dismiss a total of about 3,000 people involved in mortgage originations in the fourth quarter. The company notified staff in August of about 2,100 eliminations by the end of this month, mostly in areas processing new home loans. Mortgage lenders are paring headcount as higher interest rates discourage the refinancings they relied on to fuel profits.
"In line with the industry, we are realigning our cost structure in response to lower customer demand for mortgage refinancing," Dan Frahm, a Bank of America spokesman, said in an e-mailed statement. "We are working with employees to identify opportunities both inside and outside the bank."
Last week during an earnings conference call, executives warned that job eliminations would continue.
Reductions may include 3,000 more people in the legacy assets servicing group, which handles mortgage billing and collections, the Wall Street Journal reported today, citing people familiar with the matter. The tally includes full-time workers and people at temporary contracting firms to handle overdue loans, the Journal reported.