Bank of America to Close one of its Mortgage Units (BAC)

Bank of America Corporation (NYSE: BAC) is closing one of its mortgage units as the bank continues to streamline its business. The Charlotte, North Carolina-based bank said that it will stop buying mortgages from other banks. The business had accounted for $180 billion worth of home loans, which is roughly half the bank’s mortgage volume in 2010.

Bank of America, which is the biggest U.S. lender, put the correspondent lending unit up for sale on August 31, 2011. However, the bank failed to find any suitable buyer for the unit and has therefore to shut down the business by the end of the year.

Terry Francisco, a spokesman for Bank of America, said that the bank will have smaller volume going forward, but it is the kind of volume the bank wants. Francisco said that the bank spoke to a number of parties to sell the business; however, it could not find a suitable buyer.

Fortress Investment Group (NYSE: FIG) was said to be among the companies interested in buying the mortgage unit but could not finalize the terms with Bank of America on price, according to a report from National Mortgage News.

The correspondent lending unit had 1,400 employees in August and is led by John Dixon. The bank already slashed 200 jobs at the unit, bringing it down to 1,200. However, Francisco said that the bank has not determined in whether it will redeploy all of unit’s employees to elsewhere in the bank. He said that at the moment, the bank is focused on winding down the business.

The shut down of mortgage lending unit is part of the Bank of America’s strategy to streamline its business. Much of the bank’s problems stem from its size and CEO Brian Moynihan has been determined to make the bank as lean as possible. The bank has already announced plans to slash as many as 30,000 jobs over the next few years to reduce costs and boost its balance sheet.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.