Bank of America is looking to sell its correspondent lending business, the Wall Street Journal first reported on Wednesday. The WSJ cited “people familiar with the situation,” as the source of the information, and said the correspondent sale would be in an effort to focus the bank’s financial strength.
Now, the company has confirmed it will attempt to sell the business channel, or it could face the chopping block.
“We intend to sell the correspondent-mortgage lending division or, if a suitable deal is not identified, we will consider other options,” including winding down the business, Dan Frahm, a company spokesman, told Bloomberg News in an e-mail. For now, those operations “continue business as usual,” Bloomberg reported.
It is yet another headline for the troubled bank, which announced it was leaving the reverse mortgage business in February, noting the exit decision was due to competing demands and priorities that demanded its resources be focused on other areas of the business.
As the bank giant continues to sell off pieces of its business, it looks more and more like the decision to quit offering reverse mortgages was more about the bank’s large-scale problems and less a statement about the reverse mortgage business itself. Upon its departure, Bank of America’s market share was near 10% on the retail side and 20% of wholesale.
The company acquired Countrywide Financial in 2008 in an effort to bolster its mortgage presence. The deal, however, left Bank of America strapped with problematic loans and mortgage lawsuits. Since then, Bank of America has also shed its mortgage wholesale business.
That business, Bloomberg reported, currently employs 1,400 people.
Written by Elizabeth Ecker