Bank of America (BAC) is getting out of the wholesale mortgage business as it looks to put more resources into its direct-to-consumer retail mortgage channel, the largest U.S. bank announced Tuesday.
Any loans in the wholesale-mortgage pipeline will be fully processed, and employees in the unit will have the opportunity to transfer to other loan divisions, Bank of America said in a statement.
Bank of America is looking to devote more of its efforts to retail-mortgage origination, where it had a 22% market share last year, the company said, citing industry publication Inside Mortgage Finance. The company accounted for just 8% of the first-mortgage wholesale market in 2009.
Bank of America is also looking to cut losses from its home loans and insurance operations. That division's second-quarter loss doubled from a year earlier to $1.53 billion as the division's revenue, net of interest expense, plunged 37% to $2.8 billion, the company said in July.
About 1,000 employees will be affected by Tuesday's announcement, The Wall Street Journalreported. Bank of America officials didn't immediately respond to a request for comment.