In an official release, Bank of America has announced their plans to exit the reverse mortgage origination business. According to the announcement the restructuring will allow Bank of America Home Loans to focus on its core mortgage operations.
“We made the strategic decision to exit the reverse business due to competing
demands and priorities that require investments and resources be focused on other
key areas of our business,” said Doug Jones, Consumer Sales and Institutional
Mortgage Services executive for Bank of America Home Loans.
Under the wind down, BofA will continue to serve existing reverse mortgage customers and those with loans in process. The announcement did not clarify at what stage an application must be in to be considered currently in process.
Bank of America entered the reverse mortgage sector in 2006 and made a big splash in 2007 with the acquisition of Seattle Mortgage's reverse mortgage division, Reverse Mortgage of America. Additionally, the acquisition of Countrywide Financial Corporation in 2008, included that lender's reverse mortgage division.
Bank of America has been the number two lender in both the retail and wholesale channels of the reverse mortgage sector. The close of this divisions follow their recent decision to sell their provider of lender placed insurance, Balboa Insurance Company, and comes on the heels of a $3 billion settlement with Fannie Mae and Freddie Mac over home loans sold by Countrywide.
Some employees of the BofA's reverse mortgage divisions will be redeployed to other divisions. Those not redeployed will be provided the opportunity to apply for other open positions within the company.