Bank of America cut its appraiser staff by about 5 percent in February, Bloomberg reported March 13. The bank eliminated positions from within its LandSafe appraisal unit where the workforce had totaled nearly 1,000 employees.
“While we have known we were overstaffed since the fall, we did everything we could to delay the impacts as long as possible,” Tracy Sanderson, a LandSafe senior vice president, wrote in a staff memo Feb. 25, Bloomberg reported.
Bank of America has cut back its mortgage issuance after being burdened with more than $40 billion in costs related to defective home loans, most of which came through the bank’s 2008 takeover of Countrywide Financial Corp. The bank, however, still is the nation’s second largest mortgage lender, behind only Wells Fargo, which originated one in three U.S. mortgages in 2012.
Bloomberg reported that half of LandSafe appraisers’ work was related to transactions for bad loans, including the auction of bank-owned properties and short sales. With the bank saying it expected to have fewer overdue loans to service in 2013, staff realignment was necessary.
By the end of 2012, Bank of America reported about 773,000 of its mortgage customers were at least two months behind on payments. By the end of 2013, that figure is expected to drop to around 400,000, mainly due to the sale of mortgage servicing rights on $306 billion in loans.
Bloomberg reported that the bank’s lending dropped by half in 2012 to $78.7 billion. Chief Executive Officer Brian T. Moynihan said he hoped that cutting part of the staff that serves delinquent borrowers will help trim the bank’s expenses.
Bank of America isn’t the only bank cutting mortgage-related jobs. JPMorgan predicted that it would cut as many as 15,000 jobs in its mortgage business through 2014, Bloomberg reported. Banks expect rising interest rates to cut refinancing business, which accounted for 71 percent of loan originations last year.
The Mortgage Bankers Association predicted total lending will drop 20 percent to $1.4 trillion in 2013 and drop another 24 percent in 2014 to $1.06 trillion.