Bank of America Corporation (BAC) has shut down its mortgage business unit in Saratoga Springs and intends to retrench 34 loan underwriters and processors. This is a part of BofA’s plan to consolidate its mortgage business in the midst of an anticipated housing market slump.
Earlier this week, BofA officials had filed a layoff notice with the state Department of Labor, indicating the closure of the unit at Saratoga Springs by July 15, 2011.
Expecting a nearly 25% fall in mortgage originating activity across the industry this year, BofA has already closed or consolidated about 100 mortgage processing units across the U.S.
BofA also plans to eliminate about 1,500 jobs nationwide in home loan units and intends to redeploy only 300 of them.
BofA also commented that its home loan sales office in the same building would continue to accept applications for home purchase and refinancing loans. Moreover, the company’s other branches on Division Street and Ballston Avenue in the Saratoga region will not be affected by the closure of the mortgage unit.
According to the latest information available with the Federal Deposit Insurance Corporation, BofA has $1.16 billion of deposits in the core Capital Region, which includes the counties of Albany, Saratoga, Rensselaer, Schenectady and Schoharie. This equates to a 6% market share in the region.
With the closure of the Saratoga unit, the company takes an important step towards its mortgage business consolidation plan, which will expectedly enable BofA to improve its financials over time.
Currently, BofA retains a Zacks # 5 Rank, which translates into a short-term Strong Sell rating. However, one of the company’s close competitors, BB&T Corp. (BBT), retains a Zacks #3 Rank (a short-term Hold rating).