Bank of America exits first mortgage wholesale business
Bank of America ($13.31 -0.13%) will exit the wholesale lending channel to focus on writing more mortgages directly to consumers.
Wholesale lenders provide loan through mortgage brokers, who initiates the actual transaction with the borrower by accepting the application and processing loan. BofA said it will redirect resources to correspondent and warehouse lending operations as well as working directly with the borrower.
"By exiting the first mortgage wholesale channel, we can redirect critical operational resources to further enhance our capabilities in direct-to-consumer channels," said Barbara Desoer, president of Bank of America Home Loans.
BofA held 22% of the retail-lending market in 2009. Its share of the wholesale channel was 8% in the same year.
Doug Jones, president of BofA Institutional Mortgage Services said the bank will still purchase and finance loans from correspondent lending clients and those approved to originate loans from mortgage brokers.
Employees in the BofA wholesale unit will be able to transfer to other origination or default departments.
Write to Jon Prior.
The author holds no relevant investments.
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