Bank of America to Exit the Reverse Market and Forms Legacy Asset Servicing Division
Bank of America Home Loans has announced that it will exit the reverse mortgage origination business and move the unit’s operational resources into other critical areas serving customers. Bank of America Home Loans will continue to serve the needs of existing reverse mortgage customers and those with loans in process.
“We made the strategic decision to exit the reverse business due to competing demands and priorities that require investments and resources be focused on other key areas of our business,” said Doug Jones, consumer sales and institutional mortgage services executive for Bank of America Home Loans. “We fully understand the critical sensitivity of ensuring that our senior customers are provided with the same level of excellent customer service that we have provided in the past.”
On Thursday, Bank of America announced the definitive sale of its Balboa Insurance organization to the QBE Insurance Group Ltd. The exit from the reverse mortgage market is an additional step in the efforts of Bank of America Home Loans to focus on its core mortgage operations.
Bank of America Home Loans entered the reverse mortgage business in 2006 and expanded its presence in 2007 following the acquisition of Reverse Mortgage of America in 2007 and Countrywide Financial Corporation in 2008. Associates not redeployed will have the opportunity to apply for open positions at Bank of America.
Bank of America President and Chief Executive Officer Brian Moynihan also announced changes to Bank of America Home Loans and Insurance that will continue the company’s strong momentum in extending home mortgage credit while improving its leading mortgage modification programs for distressed homeowners and resolving legacy mortgage issues.
The decision is the latest in a series of significant actions taken to resolve outstanding mortgage-related issues while solidifying the company’s leading position in mortgage finance. Bank of America in September 2010 initiated a self-assessment of default servicing, and in October became the first servicer to voluntarily suspend foreclosure sales in all 50 states while evaluating the process. While the review of the foreclosure process found that the underlying grounds for foreclosure decisions has been accurate, Bank of America implemented a series of improvements—including staffing, customer impact, and quality controls.
Barbara Desoer, Bank of America Home Loans president, will continue building the mortgage business for Bank of America. Desoer is responsible for servicing loans for the more than 12 million mortgage customers who remain current on their accounts, and for implementing the bank’s strategy to be the preferred mortgage choice for its 50 million household customers going forward. In 2010, Bank of America delivered $306 billion in quality mortgage lending to 1.4 million customers.
At the same time, a newly formed unit, Legacy Asset Servicing, has been established. Terry Laughlin will lead this unit and be responsible for servicing all defaulted loans, and for servicing discontinued residential mortgage products. In this role, Laughlin will oversee the bank’s mortgage modification and foreclosure programs, and continue to be responsible for resolving residential mortgage representation and warranties repurchase claims.
“This alignment allows two strong executives and their teams to continue to lead the strongest home loans business in the industry, while providing greater focus on resolving legacy mortgage issues,” said Moynihan. “We believe this will best serve customers—both those seeking homeownership and those who face mortgage challenges—as well as our shareholders and the communities we serve.”
For more information, visit www.bankofamerica.com.
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