Bank of America Corp. has backed away from a deal to increase its Texas mortgage staff, though it still plans to maintain a substantial presence in the state.
In December 2004, Countrywide Financial Corp. announced plans to create 7,500 jobs in Texas by 2011. The Calabasas, Calif.-based company, which was the biggest residential lender in the country at the time, was induced by a $20 million investment from the Texas Enterprise Fund.
At the time, Texas Gov. Rick Perry said the planned hirings were “the largest job creation announcement in the United States since the year 2000.”
Just a month after it acquired Countrywide in July 2008, Bank of America Corp. said it planned to complete the hirings.
“Bank of America has adopted the agreement originally made between Countrywide and the Texas Enterprise Fund,” a spokesman told MortgageDaily.com at the time. “We are committed to meeting the terms of that agreement.”
But the bank is now backing out of the deal.
The Charlotte, N.C.-based institution issued a letter to Gov. Perry indicating it would repay the state $8.4 million so that it can abandon its obligation to create the additional jobs, spokesman Rick Simon said in a statement to MortgageDaily.com today. The termination date of the agreement was effective on Dec. 31, 2009.
“The decision recognizes the severe economic headwinds facing the entire mortgage industry during the past two years and heading into 2010, and other circumstances not foreseen five years ago when the agreement was signed,” the statement said. “The state has benefited many times over on its initial investment and will continue to benefit for years to come.”
A decline in the number of Texas mortgage employees last year at BoA was more than offset by an increase in overall Texas employment, bringing headcount to 23,000 associates in the Lone Star State. BoA said it “remains committed to substantial employment levels in the state.”
Simon noted that the move “in no way indicates there have been cuts or cuts are anticipated in the home loans space.”
