Bank of America funded $58.4 billion of home mortgages in the first quarter, a 33% decline compared to the fourth quarter, and a further sign that the megabank — like many others — is suffering from a weak home buying market.

Overall, the nation's largest servicer of home mortgages posted a company-wide profit of $2 billion in the first quarter, but its earnings were dragged down by a $2.4 billion loss in its consumer real estate services division.

BofA reported first lien originations of $56.7 billion in the quarter, and second lien fundings of $1.7 billion.

Mortgage banking income came in at $694 million. Its consumer real estate division reported total revenue of $2.1 billion.

The bank also booked $4.9 billion in non-interest expenses on its legacy servicing assets (tied to Countrywide Financial Corp.) and set aside $1.1 billion to cover expected loan buybacks from the GSEs and insurance cancellations from mortgage insurers.

BofA said it entered into an agreement with Assured Guaranty of Bermuda to resolve all outstanding and potential representation and warranty claims.

Charge-offs on first mortgages totaled $905 million, compared to $970 million in the fourth quarter.

As of March 31, the Charlotte-based bank held $261.8 billion of first mortgages and $133.6 billion in home equity loans, little changed from the fourth quarter.

In other BofA news, ASR sister publication National Mortgage News's (NMNPaul Muolo reporeted that the long-rumored ‘mega’ layoff at BofA’s mortgage unit has begun.

Late this week the company confirmed that it will shed 1,500 mortgage employees, mostly loan processors and underwriters, while closing half of its 200 small loan fulfillment centers across the country, including 27 in California, where 128 employees have been notified of layoffs. News of the layoffs was first reported by The Los Angeles Times.

"This is really an effort to align ourselves to the new reality of a significant downturn in mortgage origination volume," a spokesman told the newspaper.

As NMN went to press, the company could not be reached for further comment. It’s unclear, at this time, whether any retail loan officers are included in that number.

The cuts are just the latest step in this megabank’s long slow decline in mortgage banking. This past fall it closed its once dominant wholesale division. Among all home funders, B of A ranks second nationwide.

But BofA is not alone in the shedding of mortgage workers. Last week Wells confirmed that it was cutting 1,900 workers, but said few of those were LOs.

Industry-wide, loan production is expected to fall to $1.1 trillion this year from $1.6 trillion last year.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.