Thursday, October 25, 2007

BoA Exits Wholesale Mortgage Business

by Tanta on 10/25/2007 06:15:00 PM

Mr. Lewis is not a happy camper:

CHARLOTTE, N.C. - In addition to scaling back its investment banking operations, Bank of America Corp. is exiting the wholesale mortgage business and eliminating about 700 jobs, bank officials said Thursday.

The nation's second-largest bank will stop offering home mortgages through brokers at the end of the year to focus on direct-to-consumer lending through its banking centers and loan officers. The move also eliminates the jobs in the bank's consumer real estate unit. . . .

The cuts are part of a 3,000-job reduction engineered by Chief Executive Ken Lewis after the nation's second-largest bank reported a huge decline in third-quarter earnings.

"When Ken talks about a top-to-bottom review in five days time, you can't make that happen. These cuts were in the works, and expect more," said Tony Plath, an associate professor of finance at the University of North Carolina at Charlotte. "Don't underestimate the depth of Lewis' disappointment in earnings. This guy is pissed." . . .

"Ken says he likes the retail business, he likes getting to know customers, underwriting, and managing his risk," said Plath, the university professor. "He just doesn't like the securitization and servicing sides of the business."
Hey, I can relate, Ken. These days nobody likes being a servicer . . .