Yesterday, Bank of America, the 3rd largest retail mortgage lender in the country, announced its decision to exit retail mortgage lending in six states. Citing low mortgage volume, Bank of America will exit retail mortgage lending in the six states of Alabama, Alaska, Montana, Nebraska, Wisconsin, and Wyoming.
National Mortgage News confirmed the announcement with a Bank of America representative. The bank said that it will continue to serve customers in those six states with its online and telesales divisions.
Bank of America's retail exit comes only days after the company announced that it will soon close its correspondent mortgage lending division. The company ranks as the 2nd largest correspondent lender in the country according to NMN and the Quarterly Data Report. The company had recently announced its intent to close the division if a buyer could not be found. After talks failed, the correspondent division was slated for closure.
The correspondent division's closure will have a huge impact on FHA 203(k) Renovation mortgage for many smaller to mid-size mortgage companies. Unless the mortgage company has its own in-house draw department, most mortgage companies seller their 203(k) loans to Bank of America's correspondent division. With Bank of America being the primary player in the FHA 203(k) correspondent arena, it will leave a huge void to be filled. At Prospect Mortgage, we have our own in-house draw department to handle all FHA 203(k) and HomePath Renovation draw disbursements. This means that it will be business as usual for all of our Renovation mortgage loans.
Only time will tell about the future of mortgage lending for Bank of America.