Hundreds of nonprime mortgage employees at JPMorgan Chase & Co. will lose their jobs by yearend.
About 375 workers in retail nonprime lending received 60-day advance layoff notices in October, Chase Home Finance spokesman Tom Kelly told MortgageDaily.com Monday. Affected staff, which consists of loan officers, and support and operations personnel, will receive pay through the end of the year.
The layoffs are the result of the "traumatic reduction in subprime originations across the industry ... and weaker home prices and tougher lending standards," Kelly said.
While Chase's subprime volume of about $3 billion in the third quarter was basically flat compared to a year earlier, "with a substantially smaller overall subprime market, it doesn't make sense to maintain the same level of staffing," he added in an e-mail statement.
A nonprime retail operations center in Ontario, Calif., that will close on Dec. 15 holds 91 of the affected employees, according to Worker Adjustment and Retraining Notification Act data provided by the state's Employment Development Department.
The next largest group consists of 40 workers in Woodcliff Lake, N.J., while the other 244 layoffs are spread throughout the country, Kelly said. Besides the Ontario facility, no other retail nonprime office will close doors.
Retail staff reductions will be ensued by 430 home equity employee layoffs in Kentucky expected to be complete by mid-summer 2008.
Despite the planned layoffs, Chase recently said it has increased mortgage sales force to more than 5,000 during the past year.