Bank of America Corp., the second-largest U.S. lender, is cutting 450 mortgage jobs from West Coast offices after new loans fell short of internal forecasts, two people with direct knowledge of the plans said.
Affected employees were told yesterday about the eliminations, which involve workers who process new home loans, said the people, who asked for anonymity because the dismissals haven't been made public. California locations that will lose workers include an office in Concord, and another in Pasadena that will be shut entirely, the people said.
It's at least the fourth time in a year that Bank of America has trimmed personnel amid slack demand for home loans. Retail originations sank 49 percent to $11.6 billion in the fourth quarter, Chief Financial Officer Bruce Thompson said on Jan. 15. Competitors including JPMorgan Chase & Co. and Wells Fargo & Co. have also been dismissing people as higher interest rates discourage the refinancings that banks relied on to fuel profits.
"These notifications have been ongoing and reflect our previously announced efforts to reduce our size, resolve legacy issues and simplify our company," said Dan Frahm, a spokesman for Bank of America. The lender is still hiring in non-mortgage areas, and some employees will find jobs in other parts of the firm, he said.
The terminations are immediate, with employees receiving salaries for two months and eligible for severance pay afterward, the people said. Other offices closed this year include sites in Las Vegas and St. Charles, Missouri, the people said.
Previous dismissals by the Charlotte, North Carolina-based bank occurred in August, October and January, said one of the people. The firm cut about 3,000 employees involved in making home loans in the last three months of 2013 and 3,000 in the legacy-assets servicing unit, a person with knowledge of the plan said last year. The legacy-assets unit services delinquent mortgages, mostly from the 2008 Countrywide Financial Corp. acquisition.
Bank of America employed about 242,000 people as of Dec. 31.