Bank of America’s exit from the correspondent mortgage market will result in South Carolina layoffs.
The banking behemoth will close its global markets facility in Florence, S.C., in early January and cease correspondent operations, spokesman Brandon Ashcraft told MortgageDaily.com Monday.
As a result, approximately 105 employees will be laid off on or about Jan. 6, according to a Workers Adjustment and Retraining Notification letter provided by the South Carolina Department of Commerce.
The Florence employees received notice earlier this month that their work would be phased out within about 60 days, during which they’d receive active pay and benefits, Ashcraft said. He declined to comment when the bank stopped or will stop buying correspondent business.
“While a very difficult decision, we believe this closure is a necessary part of positioning the global markets platform for future growth,” Ashcraft said.
BoA’s correspondent market share was about 0.5 percent in the first nine months of 2007, with $3 billion in correspondent mortgage originations in that time, the spokesman said. Correspondent originations are not included in the $48 billion mortgage volume reported by BoA for the third quarter within global consumer and small business banking.
Ceasing correspondent lending is part of a restructuring BoA announced in late October for its global corporate and investment banking unit following “disappointing third quarter results in its capital markets businesses.” The Florence layoffs are within the 500 job cuts expected in global markets and global investment banking from a total of about 3,000 that will occur through the reorganization, Ashcraft said.
“While some of these changes are a direct result of our under performance, others have been contemplated for a number of months as we looked at how we could operate more effectively,” BoA Chairman and Chief Executive Kenneth D. Lewis said in the Oct. 24 announcement.
BoA will also cease wholesale operations on Dec. 31, a strategic move to focus on retail mortgages that will reportedly result in around 700 job cuts.
This summer, the lender completed layoffs of about 200 mortgage loan fulfillment employees in Phoenix and close to 400 workers in Ohio and Delaware.
