As big-bank watchers well know, Bank of America Corp (NYSE:BAC) , has been being beaten up again recently over problems tied to mortgages — specifically, the bank’s alleged behavior toward troubled mortgage borrowers.
While this kind of press tends to perpetuate the notion that B of A will never get over its acquisition of Countrywide and its boatloads of bad loans, this is not truly the case. Even as high-profile cases like the bank’s supposed railroading of homeowners trying to find a way out of their personal mortgage muddle hog headlines, the bank is chugging along, reducing its stable of toxic loans.
There’s no doubt that Bank of America Corp (NYSE:BAC) is making headway in that regard. A recent Bloomberg article noted that, of the 1.6 million problem loans the bank once had on its books, only 667,000 remain. This has led to reductions in the bank’s Legacy Asset Servicing unit , which corralled the crummy Countrywide loans into a separate department and hired staff to deal with these mortgages — and the borrowers entangled with them. Some estimate the size of this workforce to have been about 59,000 employees.
An ongoing slimming process
So, when B of A announced a combined reduction of 411 workers in two Legacy units located in Texas, it wasn’t a huge surprise. The bank has recently closed a mortgage servicing location in New York state, and both the building lease and a passel of servicing rights were ilding lease and a passel of servicing rights were snapped up by M&T Bank Corporation (NYSE:MTB), a large northeastern regional anxious to get even bigger and more diverse. Prior to that, Bank of America Corp (NYSE:BAC) had laid off more than 50 Legacy unit workers in California, as well as almost 470 in New Jersey.
Although these layoffs appear to be part and parcel of CEO Brian Moynihan’s Project New BAC, other banks, like JPMorgan Chase & Co. (NYSE:JPM) , have also seen their caseloads of bad loans decrease, and have trimmed accordingly. In February, the nation’s largest bank announced that it would slash approximately 14,000 jobs in its mortgage section through the end of next year.