Today Bank of America Corp announced it will close the wholesale lending channel of its company that it obtained with its acquisition of Countrywide Financial Corp.
The company plans to focus more operational resources toward fulfillment capacity for its direct-to-consumer retail channel, which helps existing and new customers obtain mortgage financing, and toward enhancing its leadership positions in corresponded and warehouse lending.
In a press release, Barbara Desoer, president of Bank of America Home Loans states: “By exiting the first mortgage wholesale channel, we can redirect critical operational resources to further enhance our capabilities in direct-to-consumer channels. This is an investment in strengthening our competitive position by delivering on the services our mortgage customers expect from Bank of America.”
Bank of America said it will work closely with clients to fulfill loans currently in progress. According to the press release, Bank of America’s share of the first mortgage wholesale channel was just eight% last year, but had almost 26% market share in the correspondent mortgage channel, and a 22% share of the market in retail mortgage originations in 2009.
Doug Jones, president of Bank of America Institutional Mortgage Services, stated: “Bank of America remains committed to purchasing and financing loans from correspondent lending clients, including those approved to originate loans from mortgage brokers. We intend to build upon our leadership position in that market to provide enhanced liquidity to the smaller financial institutions and independent mortgage companies that supply mortgages as our correspondent clients.”
The press release also noted that current employees impacted by the closing of the wholesale channel will be given an opportunity for redeployment to other BofA home loan units.
