Bank of America Corp (NYSE:BAC) is closing its mortgage and consumer banking units in Beachwood, Cleveland, and 1,000 of its employees will lose their jobs on October 31, according to a report from Teresa Dixon Murray of The Plain Dealer based on information from the spokesperson of the company.

Bank Of America BAC

Terry Francisco, spokesperson of Bank of America Corp (NYSE:BAC) also said that the bank will close its offices in Independence and Cincinnati with 55 and 100 employees, respectively.

Bank of America’s employees get severance packages

Employees affected by the closures received notices. Bank of America Corp (NYSE:BAC) provided its employees with severance packages.

Bank of America Corp (NYSE:BAC) is the second largest bank in the country. According to Francisco, the company continues to reduce its mortgage operations because the volume of clients applying for refinancing slowed down due to the increase of mortgage interest rates. Since January, the mortgage interest rates increased to more than 4.5%.

“Compared to peak levels in 2011, today we have fewer than one-third the number of customers who need the specialized programs and support of this team. These actions also reflect our ongoing efforts to streamline our facilities and align our cost structure with market realities,” states Francisco.

Beachwood Mayor informed regarding the situation

Bank of America Corp (NYSE:BAC) also informed Beachwood Mayor, Merle Gorden, regarding the situation. The Mayor expressed disappointment with the job cuts, but he viewed the situation as a “temporary setback.” According to the Mayor, the Cleveland Clinic owns the two buildings occupied by Bank of America’s mortgage and consumer banking units. He is confident that the clinic will be able to expand into the affected building since its operation in Beachwood is thriving.

Mayor Gorden is also hoping that the Cleveland Clinic would consider the workers laid off by the bank for any new positions it might create in the future.

Francisco emphasized that Bank of America Corp (NYSE:BAC) has a strong record in helping its employees find opportunities inside and outside of the bank. According to him, the bank is working closely with the leaders in the community to support a smooth transition.

Last week, Wells Fargo & Co (NYSE:WFC), the fourth largest bank in the country, announced its decision to lay off 2,300 workers in its home loan business because of the same reason—fewer customers are refinancing their mortgages because of increasing mortgage interest rates.