The mortgage business will remain a “core product” for J.P. Morgan, although the bank will look to gain market share with a leaner staff, setting a somewhat somber tone for mortgage hiring in 2013.
The nation’s biggest bank on Tuesday confirmed plans to eliminate between 13,000 and 15,000 jobs in its mortgage unit by the end of next year, along with 3,000 to 4,000 in its community banking business.
The decision highlights both a positive and a negative trend for J.P. Morgan and its U.S. rivals. The majority of the cuts will affect employees dealing with defaults, which are down across the board. Banks no longer need thousands of employees to review sour mortgages and help customers through the foreclosure process. That’s good news, albeit not for those who will lose their jobs.
On the other hand, big banks are not generating the same level of profit that they used to from new loans due to increased competition, among other factors. Bloomberg reported last week that margins may be down as much as 40%. That’s the bad news. Kevin Watters, the head of the J.P. Morgan’s mortgage operations, acknowledged as much.
In the current environment, mortgage hiring should remain relatively healthy in key areas, with most cuts affecting borrower relief and foreclosure areas, which are essentially customer service departments, a mortgage expert told Bloomberg. Bank of America, for example, said it plans to hire thousands in the coming year.
But when refinancing slows and interest rates eventually rise – and if margins remain paper thin – the mortgage hiring boom could soon be over.
Interview Questions…And Answers (eFinancialCareers)
Here are a handful of real interview questions recently asked by Goldman Sachs, Deutsche Bank, Merrill Lynch, J.P. Morgan and Morgan Stanley. Answers included.
More than Fair (eFinancialCareers)
Wall Street handed out an average cash bonus of nearly $122,000 for 2012, up 9% from the previous year, but bankers shouldn’t be apologizing.
The King (Forbes)
David Tepper, founder of New Jersey-based Appaloosa Management, personally made an estimated $2.2 billion in 2012, making him last year’s highest-earning hedge fund manager.
Whose Mistake? (Bloomberg)
Bank of America’s regrettable decision to abruptly impose a $5 monthly fee on debit- card users had Chief Executive Brian Moynihan’s fingerprints all over it.
Gender Divide (Financial News)
While boardrooms are becoming more gender diverse, the imbalance between men and women below the board level hasn’t changed much in the last decade.
No Sale (FIN Alternatives)
David Loeb, a Goldman Sachs salesman linked to the Galleon Group insider-trading scandal, has left the bank.
Buzz Around the Office
Tell It Like It Is (Yahoo)
Secretary of State John Kerry provided a direct, yet rather unflattering description of the freedoms provided to American citizens, telling German students: "You have a right to be stupid if you want to be."
List of the Day: Resume Filtering Software
Job seekers have a new impediment to getting in front of hiring managers: resume filtering software. Here are a few ways to slip past the guards.
- No graphics or logos.
- Use 11-point font or bigger.
- Remove your contact info from the header.
(Source: AOL Jobs)