Bank of America Corp. will lay off 700 workers as part of a plan to exit consumer wholesale mortgage lending by the end of the year and make more loans through the retail channel.
The layoffs are part of 3,000 job cuts announced earlier this week, mostly in the global corporate and investment banking division. The division was blamed for a 32 percent decline in net income, to $3.7 billion, when Bank of America released its third-quarter results.
The separate decision to exit the wholesale mortgage lending business will affect 700 employees in locations including Brea and Rancho Cordova, Calif., Dallas, and Richmond, Va. Affected employees will have the chance to apply for open positions at the company.
Bank of America said it is expanding its retail lending, including the banking center, mortgage loan officer, Loanline and e-commerce channels. Employment in the bank’s consumer real estate division totals about 13,000.
The Charlotte, N.C.-based bank said first mortgage production was up 27 percent in the third quarter compared to a year ago, driven by a 60 percent increase in originations through banking centers and a 26 percent increase in originations by mortgage loan officers.
Bank of America’s new “No Fee Mortgage PLUS” loan has produced more than $50 billion in application volume in the six months it’s been available on a nationwide basis, the company said in a statement.
According to the outplacement consulting firm Challenger, Gray & Christmas Inc., mortgage and subprime lenders announced nearly 70,000 layoffs in the first three quarters of 2007 (see Inman News story).