The Bank of America, the largest US bank by asset, will exit wholesale mortgage business to focus more on operational resources to support its direct-to-consumer retail business, helping new and existing customers acquire mortgage loans.
“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. “This is an investment in strengthening our competitive position by delivering on the services our mortgage customers expect from Bank of America.”
According to Inside Mortgage Finance (IMF), the bank holds the prominent market share in the US retail market organization, with 22 percent share in 2009. It added that BofA had an 8 percent US market share in the first mortgage wholesale business last year, and had been the dominant participant in the correspondent mortgage business, with nearly 26 percent market share.
“Bank of America remains committed to purchasing and financing loans from Correspondent Lending clients, including those approved to originate loans from mortgage brokers,” said Doug Jones, president of BofA’s Institutional Mortgage Services. “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.”
Customers affected by the bank’s exit from the wholesale mortgage business will have the opportunity for redeployment to other BofA’s Home Loans units, including the direct-to-consumer operational units, which the bank helps customers benefit from the low interest rates to purchase new homes or refinance existing mortgage.