Bank of America Laying Off 250 Workers in Mortgage-Servicing Unit

Bank of America is laying off 250 mortgage and technology workers in Charlotte, as the No. 2 U.S. bank continues to reduce its portfolio of bad loans.

The bank informed employees on Wednesday and plans to send a notice to state officials by the end of the week, bank spokesman Dan Frahm said.

In June, Bank of America said it was laying off 540 of its Charlotte employees in the same division, which is known as Legacy Asset Servicing. Of those 540 workers, 150 were able to stay on in temporary positions but are now being laid off as part of the 250 announced on Wednesday.

The 150 workers in temporary roles, as well as some of the other employees, had been working in technology positions, working with LAS and other business units.

Bank of America is notifying employees about layoffs in other cities Wednesday, but Charlotte had the largest concentration of affected workers, Frahm said.

The bank will continue to employ about 15,000 in Charlotte, he said. Displaced employees will be able to apply for other open positions at the bank, he said.

The announcement of the Charlotte layoffs comes after the bank last week announced plans to eliminate 202 LAS jobs in Norfolk, Va. In the fourth quarter, the bank reduced its LAS headcount by roughly 1,000 from the third quarter, CEO Brian Moynihan said last month.

Bank of America built up its LAS division to work with the flood of borrowers struggling to pay their mortgages in the aftermath of the financial crisis. Many of the borrowers had taken out loans with subprime lender Countrywide Financial, which Bank of America bought in 2008.

Bank of America has been eager to reduce costs in the division as it looks to boost profits at a time when banks are struggling to increase revenue.

Last month, the bank’s chief financial officer, Bruce Thompson, said the bank is seeking to lower its quarterly LAS costs, excluding litigation expenses, to $800 million by the end of this year. That’s down from $1.1 billion in the fourth quarter of 2014.

At the end of December, Bank of America had 17,100 employees in LAS, including contractors. That was down from nearly 50,000 in 2012.

The decline in LAS headcount comes as the bank has seen ongoing declines in the number of mortgage loans that are delinquent by 60 or more days. The bank reported 189,000 such loans in the fourth quarter, a drop of 42 percent from the same quarter a year earlier.

This article appeared in print in the February 12th, 2015 edition of Hamodia.