The Countrywide deal has cost BofA billions in dollars in loan losses
The nation’s biggest bank, Bank of America Corp. plans to abandon another part of its mortgage business in the latest move to downsize. Bank of America spokesman Dan Frahm said The Charlotte, N.C., bank plans to either sell or wind down its correspondent mortgage business lending division. The division fulfills mortgages originated by other banks and it is part of Calabasas-based Bank of America Home Loans.
Dan Frahm said the bank intends to sell the business. But, if a suitable deal is not reached the bank will consider other options, he added. The decision affects about 1,200 employees, primarily in California’s Westlake Village, Fla., Tampa, and Thousand Oaks. It is the latest revamp of a mortgage unit bulked up by the 2008 Countrywide Financial purchase. The bank stopped making reverse mortgages and has shut down the business that makes loans through mortgage brokers in the past two years. It has also sold a unit inherited from Countrywide Balboa Insurance.
The Countrywide deal has cost The Bank of America billions in dollars in loan losses, requests by investors to purchase soured mortgage-backed securities and legal settlements. The uncertainty about the bank’s mortgage liabilities has weighed on the stock for months.