Bank of America Exits Wholesale Lending”¦For Now??
- 25.10.2007
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Sorry for the lack of updates today folks. I was lucky enough to be invited to the Beverly Hills and Greater Los Angeles Association of Realtors meeting to hear Brad Inman and Dustin Luther talk about blogging in real estate. I highly recommend that if you are the industry you try to hear either of them speak - you’ll learn a lot about where we are headed in terms of marketing to customers.
Anyway, I digress. Thank you to EVERYONE that emailed me to let me know that news that Bank of America is exiting wholesale lending at the end of the year. They will accept loans from brokers until 11/25 which must close by 12/31. From the web site (here’s a link to the PDF of the announcement):
Important Announcement
Today Bank of America announced that it will exit the wholesale mortgage business in order to devote increased energy to its expanding retail channels.
We will be fulfilling all of our contractual obligations to you and your customers. The termination of your Wholesale Broker Agreement will be effective November 25, 2007. All loan files must be locked and delivered by that date. During this transition period, please be assured that our sales and fulfillment teams will continue to provide you with the exceptional level of service you’ve come to expect. If you have any questions during this time, please contact your account executive.
We thank you for your business and wish you continued success.
Well, I am not happy to say that I pointed to Bank of America as one of the banks who would force brokers out of the equation in my “Dead Man Walking” post. They clearly outlined to their investors their desire to focus on retail originations instead of the broker channel.
Finally, Bank of America made clear on page 66 of their 94 page Q2 2007 Investor Factbook that the “Key Business Strategy” for their First Mortgage products is retail. (PDF)
“Bank of America is focused on increasing the volume of mortgages in direct-to-consumer channels, including Banking Center and Retail Sales channels.”
It can’t be any clearer than that.
But let me toss this theory out there for you. Countrywide reports tomorrow, the results are terrible. The stock tanks to under $10 a share and Bank of America buys out Countrywide for a bargain (far less than the $18/share convertible $2 billion loan given to Countrywide earlier). Bank of America leverages Countrywide’s wholesale to sell Bank of America products.
What do you think?
