Bank of America to lay off thousands in mortgage business

Reuters

By Peter Rudegeair

Sept 9 (Reuters) - Layoffs at Bank of America Corp's mortgage business will amount to about 2,100 positions, a sourcetold Reuters on Monday, in response to weak refinancingactivity.

The downsizing reflects the second-largest U.S. bank's"ongoing efforts to streamline our facilities and align our coststructure with market realities," Bank of America said in astatement in response to questions about the planned layoffs,the total number of which was first reported by Bloomberg onMonday.

Bank of America workers in states such as Ohio, Florida andVirginia received notice of planned layoffs in late August, theCleveland Plain Dealer reported. About 1,000 of the workers tobe laid off are based in the Cleveland, Ohio area, according tolocal filings. A person familiar with the matter told Reuters onMonday that about 2,100 jobs in total would be eliminated.

Large U.S. banks including Bank of America, JPMorgan Chase &Co and Wells Fargo & Co have said they expect adecline in refinancing volume, driven by higher interest rates,to hit revenue in the near term. Applications to refinancemortgages have dropped 63 percent since a peak in early May,according to the Mortgage Bankers Association refinance index.

Bank of America is the third-largest mortgage lender in theU.S., with a market share of 5.2 percent in the second quarter,according to Inside Mortgage Finance, an industry publication.The Charlotte, North Carolina, bank extended $25.3 billion inhome loans in the second quarter, up from $23.9 billion in thefirst quarter.

Bank of America is not the only U.S. bank to scale down itsmortgage business as interest rates rise. Wells Fargo & Co announced 2,300 layoffs in its home loan unit on August21.

The San Francisco bank will make nearly 30 percent fewerhome loans in the third quarter than in the second quarterbecause of fewer refinancings, chief financial officer Tim Sloansaid on Monday.

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