Several hundred finance contract workers in Charlotte lost their jobs this week as a side effect of the $8.5 billion settlement Bank of America, Wells Fargo and eight other mortgage servicers entered into Monday.
The jobs stemmed from a 2011 settlement in which each bank was required to hire a consulting firm to conduct an independent review of the loan files of homeowners in foreclosure. Thousands of contract workers were hired around the country, with a significant presence in Charlotte.
That foreclosure review came to a halt Monday when the 10 banks agreed to make cash payments to borrowers and help others with loan modifications. That meant the contract workers were no longer needed.
At least several hundred were in Charlotte, working on loan reviews for Bank of America, said Debra Cope, a spokeswoman for Promontory Financial Group. Promontory was hired by both Bank of America and Wells Fargo to conduct their reviews. Cope said she was unable to give specific numbers due to confidentiality agreements.
Neither of the two banks responded to requests for comment.
The majority of the workers made professional-level wages and included lawyers, loan analysts and forensic reviewers. Similar job losses were confirmed in Tampa, Fla., Denver and Orange County, Calif.
One Charlotte worker who lost his job said the Promontory teams at the BB&T Center and Transamerica building uptown were called into meetings around noon Monday and told they were no longer needed and could all go home.
Bank of America’s part of the settlement includes $1.1 billion in cash payments to borrowers and $1.8 billion in mortgage relief. About 1.25 million of its customers are eligible, meaning their home was in foreclosure during 2009 or 2010.
Wells Fargo is paying $766 million cash and $1.2 billion in relief.