JPMorgan Chase to cut 1,800 jobs at US mortgage servicing unit
13 June 2013
JPMorgan Chase is cutting around 1,800 jobs at its mortgage servicing unit in the US, CNBC yesterday reported, citing a person familiar with the matter.
The report said that most of the job cuts would come from Albion, New York and Tampa, Florida. The bank will close down its call center in Albion.
The new round of layoffs comes three months after the Wall Street lender announced that it would eliminate up to 17,000 jobs over the next two years, with a majority of these layoffs coming from the same mortgage servicing unit.
The headcount at JPMorgan Chase mortgage unit had swelled to about 43,000 people from the pre-financial crisis of 20,000 as the bank needed more people to process mortgages in default.
But with an improved economy and a better credit market has led to fewer homeowners are falling behind on their mortgage payments, which in turn leads to fewer people needed to service these loans.
CNBC said that a good example is Bank of America, which had been plagued by bad loans and litigation for the past six years due to its acquisition of troubled home lender Countrywide in 2006.
But in the span of just one year, it has seen its portfolio mortgages delinquent 60 days or more fall to $700 million from $1.1 billion, and for this reason, the unit has already eliminated around 14,000 jobs.