October 7th, 2011 10:00 AM by Lehel S.
The rate for a 30-year fixed mortgage dropped to 3.94% in the latest Freddie Mac tally of home lenders, the first sub-4% rate in the survey's 40-year history.
The news out Thursday confirmed that the Federal Reserve has succeeded in driving mortgages to record lows for solid borrowers, who have been refinancing homes into rates at or under 4% for several weeks.
Nonetheless, the fact that the low rates have failed to ignite home sales has been painfully apparent. In the latest indication, Bank of America Corp. is closing 40 former Countrywide mortgage offices, firing hundreds of loan officers.
The offices handled only home loans and not other BofA services, in contrast to a recent push at the bank to integrate its financial offerings in full-service branches. "They were located mainly in parts of the country with no Bank of America branches," including Alaska, Alabama, Wisconsin and Wyoming, bank spokesman Terry Francisco said.
Other offices were closed based on waning loan volume, Francisco said, including California offices in Tustin and Arroyo Grande. He said many of the offices had "six or eight" employees; an exact count of the job cuts was not immediately available.
Coutrywide Financial Corp., once the nation's largest home lender, had a huge network of mortgage offices across the country. Even after the closure of the 40 offices over the next few weeks, Bank of America will still have more than 500 standalone home lending shops, Francisco said.
Bank of America, whose 2008 purchase of Calabasas-based Countrywide has proved disastrous, is undertaking a major cost-cutting effort that Chief Executive Brian Moynihan hopes will get the nation's largest bank back on solid footing. More than 10% of BofA's full-service branches are slated for closure.
A first round of job cuts, now underway, is focused mainly on BofA's consumer businesses. It is expected to reduce employment by at least 30,000, more than 10% of the bank's job base. A later round will focus on BofA's investment bank and wealth-management businesses.