PHH Mortgage Corp. says that it will lay off 91 employees at its Amherst location at year’s end.
The cuts represent 31 percent of its 294-member workforce at the Wehrle Drive location, according to a notice filed with the state Department of Labor.
In August, PHH signaled that cuts were coming, following a business decision by HSBC Bank USA. But until the filing with the state, the number of reductions was not disclosed.
The subsidiary of New Jersey-based PHH Corp. specializes in processing and servicing mortgages. HSBC decided to sell the servicing rights to about 139,000 mortgage loans subserviced by PHH, and PHH said the purchaser did not intend to retain PHH for those services.
PHH does not intend to keep its remaining operations at the Wehrle Drive site, said Dico Akseraylian, a PHH spokesman.
“We expect to have more detail with respect to facilities plans by year end,” Akseraylian said, adding that PHH is evaluating its “long-term need to maintain a presence in Williamsville.”
In 2012, HSBC Mortgage Corp. agreed to transfer its retail mortgage processing and servicing business to PHH. HSBC retained ownership of the loans, paying fees to PHH for providing services.
PHH said that as of June 30, the units being transferred represented 29 percent of its total subservicing portfolio units.
The company estimated that this represented a reduction in pretax earnings of about $10 million on an annualized basis, “exclusive of any offsetting management actions.”
PHH said that between HSBC’s decision and Merrill Lynch’s previously disclosed plan to insource its subservicing portfolio, the company expects its subservicing units to decline by 229,000, or 47 percent of its total, by Dec. 31.
Last year, PHH moved into a $34 million Amherst location built by Zaepfel Development. When plans for that building were set in motion, PHH had ambitions to grow a much larger workforce in the region, but those expansion plans didn’t come to fruition.