After taking huge losses in mortgage lending, various banks are getting out of the game. Bank of the America is the latest bank to reduce operations.
It doesn’t seem like anyone wants to lend money anymore unless it is to those with great credit.
The NYT reports: Bank of America closed its wholesale mortgage-lending operations on Tuesday, steering business away from mortgage brokers and toward loans to consumers and community banks, The Wall Street Journal reported.
The bank’s move may have the effect of limiting consumer choice in the mortgage rate market and promote Wells Fargo to the dominant position in the wholesale business, The Journal noted.
However, Barbara Desoer, president of Bank of America Home Loans, stressed that the lender’s decision would allow it to play to its strengths and have a more direct relationship with its customers.
“We tend to prefer business where we have scale,” Ms. Desoer told The Journal. “We love the direct-to-consumer business because it’s very closely aligned with the consumer franchise that Bank of America has.”