Bank of America Will Exit the Wholesale Mortgage Business
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.