Bank of America Corp., the third-biggest US mortgage lender through independent brokers, plans to stop offering home loans through that channel, focusing on direct lending and acquiring debts from other originators.
The bank said it will phase out the business “following an orderly transition of loans currently in process.”
Lenders including JPMorgan Chase & Co. have stopped offering mortgages through brokers after lax practices among people signing up borrowers helped create bad loans and fueled losses. Bank of America made $8.2 billion of loans through mortgage brokers during this year’s first half, giving it an 11.8 percent market share, according to Inside Mortgage Finance. That ranks it behind Wells Fargo & Co. and Provident Funding.
About 1,000 Bank of America employees work in the broker division, and the “vast majority” will be able to move to jobs in other units, said Rick Simon, a spokesman for the Charlotte, N.C., lender.
Brokers accounted for 10 percent of US home lending during the first half, down from a peak of 31 percent in 2005, according to Inside Mortgage Finance, a trade publication.
