Bank of America to lay off thousands in mortgage business

Layoffs at Bank of America Corp's mortgage business will amount to about 2,100 positions, a source told Reuters on Monday, in response to weak refinancing activity.

The downsizing reflects the second-largest US bank's "ongoing efforts to streamline our facilities and align our cost structure with market realities," Bank of America said in a statement in response to questions about the planned layoffs, the total number of which was first reported by Bloomberg on Monday.

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

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

Home Loan Demand Drops, Refinancing Loses Luster

U.S. mortgage applications for home loan refinancing fell for a second straight week, dropping to its lowest level since early August, as rock-bottom interest rates failed to boost demand.

While historically low mortgage rates have been a glimmer of hope for a housing market that has struggled to find footing in the absence of government support, it failed to foster demand for loans to purchase a home last week.

The Mortgage Bankers Association on Wednesday said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Sept. 10 decreased 8.9 percent.

The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 0.8 percent.

The MBA's seasonally adjusted index of refinancing applications decreased 10.8 percent, reaching its lowest level since the week ended August 6. More...