Several dozen mortgage servicing employees in Florida have been notified of impending layoffs by JPMorgan Chase & Co. But layoffs were minimized as a result of higher demand for production staffing.
As loan delinquency was on the rise during the past few years, Chase was forced to beef up its servicing staff. In a letter to shareholders this past April, the New York-based company’s chairman and chief executive officer, Jamie Dimon, said that the servicing staff had ballooned to 23,000 employees as of April from just 6,800 in 2008.
But the rate of late payments has recently subsided. Delinquency of at least 30 days on loans excluding credit-impaired mortgages acquired from Washington Mutual Bank, which had been 6.88 percent in the second-quarter 2010, has since fallen to 5.16 percent. Delinquency on the WaMu loans has tumbled from 27.91 percent to only 21.38 percent during the same period.
With delinquency abating, the need for a bloated servicing staff has diminished.
In Jacksonville, Fla., roughly 375 servicing positions were recently eliminated after evaluating current business needs, Amy Bonitatibus, a Chase spokeswoman, said in a telephone interview. More than 2,700 employees are based at that site.
However, all but 74 of the impacted Jacksonville employees — or approximately 3 percent of the staff — were re-assigned to another department. The 74 employees were previously notified about the impending layoffs, which will occur next month.
“The biggest change is that we are shifting a substantial number of employees to originations,” Bonitatibus said.
She went on to say that more people are financing a home purchase or refinancing an existing loan and noted that volume generated through the Home Affordable Refinance Program remains strong.
“HARP volume has exceeded our expectations,” Bonitatibus added, “and we continue to see high refinancing volumes across the board.”
Chase reported second-quarter production of $44 billion, increasing from $38 billion three months earlier and $34 billion a year earlier.
In all, thousands of mortgage servicing employees have been re-assigned to other jobs at Chase.
As of June 30, total mortgage headcount at Chase was 49,535, according to earnings report data.
