Bankers: Know your customer!
Associated PressCHARLOTTE, N.C. - In addition to scaling back its investment banking operations, Bank of America Corp. is exiting the wholesale mortgage business and eliminating about 700 jobs, bank officials said Thursday.
The nation's second-largest bank will stop offering home mortgages through brokers at the end of the year to focus on direct-to-consumer lending through its banking centers and loan officers. The move also eliminates the jobs in the bank's consumer real estate unit.
The bank shared details of the decision with The Associated Press before its public announcement scheduled for Friday.
The wholesale debt biz always looks great to banks -- until they relearn the perils of loaning money through third parties who don't have the same incentives. It's starting to look like the mortgage brokers really went on a bender this time, and bank after bank is deciding it doesn't want to have anything to do with them. Baltimore's First Mariner Bancorp got out of the wholesale mortgage business earlier this year after getting shocked by up to $42 million in bad loans. So far the mortgages that First Mariner originated with its own employees and oversight, by contrast, have been pretty much problem free. See this coming Sunday's column for more.
Comments
I used to work for BofA....and a lot of former BofA employees saw this coming. This is why they jumped ship, and found themselves another job!
Posted by: Charlotte Mortgages | October 28, 2007 12:32 PM