Our sources tell us that Bank of America is refocusing its resources on direct-to-consumer mortgage channels. Their intent is to sell the Correspondent Lending division to another player in the market, but if a suitable deal is not identified, Bank of America will consider winding down the Correspondent Lending business. The Bank says it is in preliminary discussions with respect to a sale of the business. In the meantime, the Bank advises lenders that there will be no immediate impact to its correspondent lending programs, clients or associates — operations will continue business as usual. The move also part of the bank’s efforts to strategically allocate capital and manage risk given current and pending capital rules and regulations. These factors may limit the likelihood of a sale to another bank, leaving REITs and private equity is the likely bidders.
We have been told that they will stay in the warehouse lending business. However we feel that once the Correspondent division is gone, they will most likely concentrate on larger lines with fewer lenders.