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BofA Confirms Servicing Job Cuts

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Lower delinquency on residential loans serviced by Bank of America Corp. has prompted a reduction in the number of employees that handle distressed mortgages.

The Charlotte, N.C.-based company previously reported that it had 41,700 people employed in its legacy asset servicing division as of Sept. 30, 2012.

But as past-due payments have retreated on home loans — 30-day delinquency on loans that are not government-insured has fallen to 2.1 percent as of the end of last year from 3.3 percent at the end of 2009 — staffing needs have subsided.

“Bank of America continues to make strong progress with our mortgage customers in need of assistance and has helped more than 1.5 million mortgage customers avoid foreclosure,” a statement from BofA said. “As a result of the progress made and the decreased number of delinquent loans we now service, we have reduced positions in our legacy asset servicing business.”

A spokeswoman indicated that it is the bank’s policy not to provide specific numbers on reductions.

BofA built the legacy asset division as a temporary solution that utilized contractors and vendors “in anticipation of the eventual need to reduce the size of the organization and to integrate with other operations across the company,” according to the statement.

BofA said that every effort is being made to try and find positions in other divisions for impacted employees.

BofA isn’t the only mega-lender scaling back on its mortgage servicing staff.

Nearly a thousand employees in New York, South Carolina and Texas are being laid off at JPMorgan Chase & Co. as a result of the agreement reached earlier this month with the Office of the Comptroller of the Currency and the Federal Reserve to end foreclosure reviews required by April 2011 consent orders.

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