As big-bank watchers well know, Bank of America (BAC 1.59%), has been being beaten up again recently over problems tied to mortgages -- specifically, the bank's alleged behavior toward troubled mortgage borrowers.

While this kind of press tends to perpetuate the notion that B of A will never get over its acquisition of Countrywide and its boatloads of bad loans, this is not truly the case. Even as high-profile cases like the bank's supposed railroading of homeowners trying to find a way out of their personal mortgage muddle hog headlines, the bank is chugging along, reducing its stable of toxic loans.

There's no doubt that Bank of America is making headway in that regard. A recent Bloomberg article noted that, of the 1.6 million problem loans the bank once had on its books, only 667,000 remain. This has led to reductions in the bank's Legacy Asset Servicing unit , which corralled the crummy Countrywide loans into a separate department and hired staff to deal with these mortgages -- and the borrowers entangled with them. Some estimate the size of this workforce to have been about 59,000 employees.

An ongoing slimming process
So, when B of A announced a combined reduction of 411 workers in two Legacy units located in Texas, it wasn't a huge surprise. The bank has recently closed a mortgage servicing location in New York state, and both the building lease and a passel of servicing rights were snapped up by M&T Bank (MTB 1.20%), a large northeastern regional anxious to get even bigger and more diverse. Prior to that, Bank of America had laid off more than 50 Legacy unit workers in California, as well as almost 470 in New Jersey. 

Although these layoffs appear to be part and parcel of CEO Brian Moynihan's Project New BAC, other banks, like JPMorgan Chase (JPM -0.40%), have also seen their caseloads of bad loans decrease, and have trimmed accordingly. In February, the nation's largest bank announced that it would slash approximately 14,000 jobs in its mortgage section through the end of next year.

What was surprising in the B of A announcement was an unusual comment by the bank's spokesperson, who said that the bank is not planning to cut back on the service provided to borrowers who need its help. I believe this was said not only to soothe remaining mortgage holders that have not yet been able to resolve their loan issues, but also in direct response to the new wave of ire that has been unleashed in response to the revealing testimony in the loan modification case.

A new effort at customer relations?
I wouldn't be surprised if there isn't yet another public relations improvement plan afoot. Moynihan has made improving the bank's pitiful standing with consumers a priority this year, though he hasn't made a ton of headway yet.

Still, you can't blame the guy for trying. What is really interesting is that Bank of America's Merrill Lynch division seems to have it down, having recently been cited by J.D. Power for customer satisfaction in its corporate and commercial banking sections. The bank earned a spot in Power's Call Center Certification Program, so tickled were the survey respondents who had used the bank's Client Services call center.

Is there some reason the folks from BAML can't saunter over to the retail side of the bank and share their secrets? If Moynihan is serious about improving B of A's reputation with the general public, I suggest he give this a try.