Bank of America plans to lay off 202 employees in a loan servicing unit in Norfolk, Va. because of the ongoing decline in the number of delinquent mortgages, the company said Tuesday.
Notice of the Bank of America layoff appeared on the Virginia Workforce Network's online listing of planned layoffs or closures. Layoffs are expected to take place March 29.
The bank's Legacy Asset Servicing division employed 42,000 full-time workers at its peak in 2012 as the bank handled more than a million past-due mortgages. The bank has since cut a third of those jobs as it reduces the number of delinquent loans through mortgage modifications, short sales, foreclosures and wholesale loan sales.
The bank created the division in 2011 to help mortgage customers who were at risk of foreclosure or defaulting on their home loans, bank spokeswoman Jumana Bauwens said in a statement.
"The number of delinquent mortgage loans we service has decreased to one-seventh of their peak levels. Due to the dramatically 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. The employees impacted by the changes in our business are eligible for and encouraged to apply for open positions at the bank," Bauwens said.
"We have a strong track record for helping employees transition into new positions within the company. For those impacted and not able to find a new role at the company, we work closely with them and provide career counseling, services and resources to assist with finding a new role," she added.
Bank of America will continue to provide help to customers at risk of foreclosure and is maintaining staff to help administer consumer relief - in the form of loan modifications or new loans for borrowers with good credit - as part of the company's $7 billion civil settlement with the Department of Justice. That settlement announced in August also included nearly $10 billion in fines connected with mortgage fraud practices by Countrywide Financial Corp. and Merrill Lynch before Bank of America acquired them.
According to the Department of Justice, Bank of America also conceded that it originated risky mortgages and misrepresented the quality of loans to investors in residential mortgage-backed securities.