BANK OF AMERICA ANNOUNCES EXIT FROM CORRESPONDENT MORTGAGE BUSINESS!

Reblogger C. Lloyd McKenzie
Real Estate Agent with Prudential Allstar Realtors 16784

At a time when there are so many unemployed, Bank of America now decides that it will layoff 3500 employees.  What are they thinking?  There is an alternative approach to this....what about having all executives take a pay cut?  Would that be too much to ask?  Please stop by Doug Bullwinkel's blog and leave him a message.  

Original content by Doug Bullwinkel

BANK OF AMERICA ANNOUNCES EXIT FROM CORRESPONDENT MORTGAGE BUSINESS!

Bank of AmericaBank of America is attempting to sell its correspondent lending division as it looks to divest itself of additional parts of its home loan divisions.  Plagued by upwards of $1 Trillion of problem home mortgages, Bank of America, currently the biggest U.S. Bank, plans on cutting 3,500 jobs over the next few weeks.  These moves are an effort by the bank to raise capital to meet new industry standards.

Correspondent lenders fund loans and then sell them to the larger banks.  Banks, including Bank of America, use these correspondent lenders to generate more loans for them to sell to investors like Fannie Mae and Freddie Mac.  Bank of America will then service the loans to generate additional revenue. 

Loans purchased from these correspondent banks accounted for around 47% of Bank of America’s mortgage originations, or nearly $27.4 Billion, in the first quarter of 2011, according to a Wall Street Journal article.  There are many of these Correspondent Lenders or Mortgage Banks currently originating these loans. 

Bank of America spokesman Dan Frahm said, “We intend to sell the correspondent mortgage lending division or, if aRisk suitable deal is not identified, we will consider other options.”  The correspondent division of Bank of America currently employs over 1,000 people.

What does this mean to you as a Realtor?  Fewer choices and less competition.  Many Mortgage Bankers use Bank of America's correspondent division for their specialty loan products because Bank of America is the Master Servicer, designated for many of these bond programs.  FHA 203S Rehabilitation loans, the CalSTRS Home Loan Program for Teachers, CalHFA, and the FHA NHF Grant programs for down payment assistance are just a few of the programs that could be affected.   By denying access to Mortgage Bankers for these programs, you could see a dramatic reduction in availability for these programs and declining levels of service in the near future. 

We are one step closer to having a handful of giant banks control the entire mortgage industry.  This is just another sign of a constantly changing lending environment,  pounded by new Federal regulations and scrutiny over the past several years.  Most of the recent legislation has done little or nothing to fix the problems.  Instead, the result has been to eliminate consumer choices and increase the costs of obtaining a home mortgage.    

 

   NOTE: Doug Bullwinkel is a licensed California Mortgage Loan OriginatorNMLS #281609 for Vitek Mortgage with over 30 years in the Real Estate and Mortgage Industry. He specializes in Niche loan programs including the CalPERM-CalPERS Member Program, CalSTRS Home Loan Program for Teachers, VA and CalVet for Veterans, FHA, USDA, FNMA Homepath, CalHFA, CHF Grants and more. His website is LenderSolutions.com. He can be reached at (800) 636-8910 for more information

 

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Rainmaker
692,665
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hello C. Lloyd,

Just like the big department stores and the big three auto makers, the big banks will find a way to try to corner the market on home mortgages.

What happens when the bank gets in financial trouble. Then they will want to sell off "paper" to help balance the books.

Have a great weekend.

Best, Clint McKie

 

Sep 10, 2011 08:48 PM #1
Rainmaker
696,297
Kay Van Kampen
RE/MAX Broker, RE/MAX Solutions - Springfield, MO
Realtor®, Springfield Mo Real Estate

Instead of laying all these people off, why don't they train them to do work in the short sale department?  Maybe the short sale process would get faster.

Sep 10, 2011 10:07 PM #2
Rainer
234,320
Doug Bullwinkel
Vitek Mortgage Group - Roseville, CA
NMLS #281609

Thanks for the re-blog, C. Lloyd.  Bank of America will continue to have problems into the future. The combination of bad policies and the forced acquisition of Countrywide's bad assets will continue to haunt them.

Sep 11, 2011 03:12 AM #3
Rainmaker
594,876
Dan Edward Phillips
Dan Edward Phillips - Eureka, CA
Realtor and Broker/Owner

Good Morning C Lloyd, this is an event that I was not aware of.  Thank you for putting the post back up and sharing the news.

Sep 11, 2011 06:52 AM #4
Rainmaker
494,252
C. Lloyd McKenzie
Prudential Allstar Realtors - Albuquerque, NM
MBA - Prudential Allstar Realtors -

Good Morning Clint:  Uou make a very good observation.  Interesting fact though, the big three automakers actually employ people, and make things.

Hi Kay, Great to see you again.  The management at BoA is not in tuned with reality.  You present a great idea.  

Hello Doug: You make a very good point.  In my line of thinking, they should focus on what they have control over (their policies) and try to mend all fences.  If BoA used a more client-centered approach to business, it could change their standing.  What gives these these jokers the right to treat people the way they do?  Americans have short-term memories, so they will forget...I had an account with Bof A back in 1996, which I closed and have not stepped foot in their doors since.  

Good morning Dan: Great to see you in the rain.  Thanks for your comment.  Have a great day.

 

 

 

Sep 11, 2011 09:08 AM #5
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Rainmaker
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C. Lloyd McKenzie

MBA - Prudential Allstar Realtors -
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