Boston, MA 10/31/2013 (wallstreetpr) – Bank of America Corp (NYSE:BAC) which is one of America largest banks has announced that it is cutting down up to 4,000 mortgage jobs. The rising mortgage rates which have cut into demand for home loan refinancing has precipitated the layoffs in some of the banks. The move by Bank of America is not a surprise as Wells Fargo, JP Morgan Chase and Citigroup had earlier done the same in an effort of trying to reduce their wage bill. Bank of America has already notified about 1,200 employees about the termination of their contracts; most of the workers that are being terminated worked in the mortgage sections and were on full time basis.
The bank will cut down the remaining 2,800 jobs before the end of the year mostly in the division that collects payments from borrowers. The bank has been left with fewer troubled loans to manage five years after the hard felt financial crisis in the mortgage industry. Loans that were delinquent by more than 60 days have fell to 398,000 by 94, OOO in the third quarter alone with the bank anticipating a decline to a low of 375,000 before the close of the year. The bank has reported a decline in lending volume by 11% in the third quarter as compared to the second quarter. Applications not yet processed by the bank have also dropped by 60%
The company is cutting down on the jobs as it expects to make fewer home loans in the fourth quarter and the cuts will mostly affect employees working in California, Texas and Florida. Rising interest rates has mostly weighed into mortgage refinancing since the start of the year. Wells Fargo announced that it was cutting 925 jobs in addition to 5,300 employees who had been notified earlier.
