Wealth Lending Unit pared down by Bank of America

According to a source with expertise in the matter, Bank of America Corp. is moving around 200 workers who specialize in loan underwriting from its financial advisory unit to other positions as rising interest rates decrease loan demand.

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According to the source, fewer than 10 people were fired. The impacted parties' salaries will remain the same, but bonuses will change depending on their new duties.

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A bank representative said, "As our company and customer demands expand and adapt, our focus remains to be on aligning our personnel to areas of greatest need. We are realigning talent to support certain sectors based on the state of the market.

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The same source claims that the redeployed staff do not belong to the group of wealth management banking experts that Merrill President Andy Sieg had earmarked for expansion last year. By the end of 2022, the company intended to have 800 of the professionals, who assist in locating bank sales prospects for wealthy clients.

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The hiring process has slowed down at several lending companies as a result of higher rates. Competitors JPMorgan Chase & Co. and Wells Fargo cut hundreds of home lending employees after the Federal Reserve hiked interest rates, dampening what had been a scorching hot housing market.

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Unlike other companies in the sector, Bank of America has refrained from making significant employment cuts. The Charlotte, North Carolina-based corporation began instructing executives to freeze hiring earlier this year, save for the most critical positions, as it attempts to control expenses and get ready for a potential economic slump. The relocation in the loan industry follows the choice last year to reduce hiring as fewer workers left on their own volition.

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During the financial crisis of 2008, the biggest US banks mostly came to the conclusion that moderate use of mortgages was best. Tens of millions of dollars in liabilities, primarily related to the purchase of failing subprime mortgage lender Countrywide Financial Corp., were resolved by Bank of America through a series of judicial settlements.

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After a boom in lending during the initial half of 2022, banks have pulled back from financing buildings and other commercial property amid falling demand and rising rates. According to a report at the time by Trade Algo, the firms increased their level of scrutiny and tightened borrowing conditions in the second part of the year while offering less new commercial property loans.

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