I made the Wall Street Journal: Banks’ Mortgage Job Cuts Spread Wide Bank of America, Wells Fargo Shed Employees Across U.S. PermalinkCloseFacebookTwitterExpand/Collapse Bank of America on Thursday became the latest big lender to report job cuts in response to declines in mortgage revenue.The cutbacks often have affected people who work far away from Wall Street. By Julie Steinberg Bank of America Corp. on Thursday became the latest big lender to report job cuts in response to declines in mortgage revenue. The Charlotte, N.C., bank notified about 1,200 employees in its legacy mortgage group and its home-loans fulfillment unit that they will be let go, said a person familiar with the matter. The bank also aims to cut about 2,800 other jobs in its legacy asset-servicing group, the unit that manages the bank’s mortgage portfolio. The cutbacks at the nation’s biggest banks, while not as dramatic or far-reaching as those that took place after the 2008 crisis, often have affected people who work far away from Wall Street. Since July, Wells Fargo, the largest U.S. mortgage lender, has cut about 6,225 mortgage jobs in cities such as Des Moines, Iowa, and Charlotte. Bank of America in August announced cuts of 1,700 mortgage employees in centers in the Cleveland area, Sunrise, Fla.; Buford and Atlanta, Ga.; Richmond, Va.; South Jordan, Utah; and Taunton, Mass. The most recent round of layoffs affected workers in Texas, California and Florida. Danville, Ill. has seen both the boom and bust in mortgage jobs. The small town on the eastern edge of the state benefited from the presence of a Citigroup mortgage-processing center as it attempted to transition away from its industrial roots. But Citigroup closed its Danville, Ill. office in July. “The Danville facility was originally established to handle the surge in demand for refinancing; however, due to the ongoing decline in refinance volumes, the excess capacity Danville provided was no longer needed,” a spokesman for Citigroup said in an emailed statement, adding that the bank provided severance and support in transitions. Atlanta Kegley, 23 years old, was one of the employees laid off from the Danville center. Hired in August of last year to refinance mortgages, she was promoted in January to a position that required finding and originating new mortgages. Ms. Kegley, a single mother who takes care of her 3-year-old daughter Kada, went from making roughly $3,500 a month to living off $500 unemployment checks every two weeks. She has applied for more than 15 jobs since she was laid off, but hasn’t been able to find anything, she says. When she was working at Citi, she said, the $16.50-an-hour wage was like a “gift from God.” “All of a sudden I was hearing people talking about interest rates going back up. If rates go back up, who’s going to refinance? Nobody.” Now she is trying to find a job outside the mortgage industry, one that doesn’t depend on the market. “Now my thinking for a job is, what am I still going to be able to do in 10 years, no matter what happens in the market?” She is considering selling life insurance. Danville Mayor Scott Eisenhauer says the Citi center never was meant to be a permanent office. Since it closed, smaller companies have rented out the space and employed some of those laid off, he said. He now aims to help fill 1,500 positions spread across industries like health care, manufacturing and technology. Banking isn’t one of the industries that needs many workers in the area, he says. “Certainly, any loss is a loss,” he says, referring to the Citigroup layoffs. “These are jobs we would have loved to have had in perpetuity. But the nature of that business is they are short-term employment opportunities.” Danville currently has 12% unemployment, Mr. Eisenhauer says. Paul Hindman, a managing director who specializes in mortgage talent at Management Advisors Executive Search, a Raleigh, N.C.-based financial-services recruiter, says he doesn’t expect to see banks to do much hiring of “operational” roles such as underwriters, loan processors and loan closers through at least the first quarter of next year. “It’s like giving someone the lottery then it being ripped away,” Ms. Kegley said. “I know the market is rebuilding but it’s hard for the people who were originally selling those mortgages.” Write to Julie Steinberg at julie.steinberg@wsj
Posted on: Thu, 24 Oct 2013 22:01:03 +0000
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