An inconclusive search for a buyer will lead ""Bank of America"":https://notice.bankofamerica.com/content/enhanced-splash/html/home-splash-pagev2.html?bactoken=96195547206 to shutter the mortgage correspondent unit it had originally hoped to sell. The move means the mortgage giant will wipe its hands of the correspondent business by yearend, with a series of transitions in store for the 1,200 or so employees currently on the payroll.[IMAGE]
In an internal e-mail provided to _MReport_, Bank of America said that it would shutter correspondent mortgage operations by yearend. An ""_American Banker_"":http://www.americanbanker.com/issues/176_192/bank-of-america-fortress-correspondent-mortgage-1042789-1.html story cited fallout over price negotiations with ""Fortress Investment Group LLC"":http://www.fortressinv.com/, the favored buyer.
""We completed a thorough review of market opportunities, and will pursue an orderly wind-down of our correspondent lending activities,"" Barbara Desoer, president of Bank of America Home Loans, said in the e-mail. ""Pursuing this path now provides us with the opportunity to align resources to our direct to consumer channel and focus on our strategy to deepen relationships with existing customers and use mortgage products to acquire new relationships.""
Speaking with _MReport_, Terry Francisco, a spokesperson for the mortgage giant, says Bank of America ""couldn't find a suitable buyer,"" which ""led us to our decision to responsibly close down the unit.""[COLUMN_BREAK]
Asked how the move relates back to a broader restructuring shift by the bank, he calls the shutdown ""a continuation of the strategy that we began over a year ago when we exited wholesale lending and [reverse] mortgage originations. We believe that we have a strong opportunity to deepen that relationship with mortgage consumers and devote more of our resources toward mortgage products.""
Shutting down the correspondent lending unit means the bank will finally exit a business in which it found itself posting increasingly steeper quarterly losses. A ""_Bloomberg News_"":http://www.businessweek.com/news/2011-10-03/bofa-to-shutter-correspondent-lending-unit-after-auction-fails.html story reported correspondent originations falling from $27.4 billion over the first quarter to $21.8 billion over the second quarter.
The shift toward a shutdown also follows a series of other big moves by the bank as it adopts a new strategy and restructures much of the sprawling business.
_Bloomberg_ quoted CEO ""Brian Moynihan"":http://mediaroom.bankofamerica.com/phoenix.zhtml?c=234503&p=irol-govBio&ID=197628 as expressing his intentions to turn Bank of America into a ""smaller, more focused company"" by reportedly slashing $5 billion in expenses and some 30,000 jobs.
And whither the 1,200 or so correspondent employees currently listed on Bank of America's payroll?
In the e-mail, the mortgage giant offered that it would transition employees from the correspondent business to Home Loans and Legacy Asset Servicing divisions.
""We will look to deploy them,"" Francisco offers. He cites ""opportunities├â┬ó├óÔÇÜ┬¼├é┬ª in other parts of the business, including opportunities to help our distressed homeowners who we are helping through loan modification.""
He says that some retraining may be in store for deployable correspondents, specifically those with underwriting experience.
""We believe their skills are applicable in other parts of the mortgage business,"" he adds.