Bank of America Corp. has established a new unit to deal with its mortgage-related headaches.
The Charlotte banking company announced Friday the establishment of Legacy Asset Servicing to oversee the servicing of all defaulted residential mortgage loans and discontinued lending products. The unit, which will be led by Terry Laughlin, will handle all of the bank's modification and foreclosure programs as well as be responsible for resolving repurchase claims.
BofA also said that it will exit the reverse mortgage business, an area it entered in 2006 and expanded with its purchases of Reverse Mortgage of America and Countrywide Financial Corp.
Moving its problem loans to a separate unit will enable the bank's core mortgage business, Bank of America Home Loans, to focus on the more than 12 million customers who are current on their mortgages, in addition to generating new business. That unit will continue to be run by Barbara Desoer, the bank said.
The new structure will provide "greater focus on resolving legacy mortgage issues," said Brian Moynihan, president and chief executive, in a press release. "We believe this will best serve customers — both those seeking homeownership and those who face mortgage challenges."
Laughlin joined BofA last summer from OneWest Bank, the successor of failed thrift IndyMac Bank. He replaced Jack Schakett, who left to pursue other ventures, and was put in charge of limiting mortgage loan losses and monitoring relationships with mortgage investors.