Bank of America has decided to merge its Home Loan Services (HLS) affiliate in Pittsburgh, a subprime specialty servicer, into its main servicing operation.
At press time few details on the merger were available, but a spokeswoman told National Mortgage News that the customer changeover will begin Nov. 1.
She stressed that BofA will not leave the Pittsburgh area and that the HLS unit will focus on default management servicing.
At midyear, HLS serviced $20.4 billion in nonprime residential mortgages, a 20% decline from the same period a year ago, according to figures compiled by National Mortgage News (NMN)and the Quarterly Data Report (QDR).
Among subprime servicers HLS ranks 11th nationwide, according to NMN/QDR.
BofA inherited the HLS when it bought the struggling Merrill Lynch two years ago. When the subprime industry hit the skids in 2007 Merrill had tried to sell the company but with no luck.
HLS was the servicing arm of First Franklin Financial Corp. (FFFC), San Jose, Calif., once a top ranked subprime lender. Merrill bought the company in late 2006, paying $1.2 billion for FFFC, HLS, and another affiliate.
It turned out to be one of the worst subprime acquisitions ever made by a Wall Street firm and had a direct impact on Merrill's near collapse.