Bank of America says all those rumors about it exiting the correspondent mortgage channel are just not true.
Late Tuesday a BofA spokesman told National Mortgage News that it has no plans to exit the channel and is committed to it.
Last fall BofA, the nation’s second largest home originator, exited the wholesale channel. In early May rumors began to circulate that it might also exit correspondent lending. Those rumors gathered steam in early July when a handful of top correspondent and warehouse executives departed B of A for PennyMac.
The way things stand now, BofA is totally dependant on its retail and correspondent channels for originating all of its single-family product.
In the second quarter, the banking giant originated $40.3 billion of home mortgages – 54% of which were purchased from correspondent lenders. The balance, 46%, were originated through its retail network.
"We have been able to leverage our platform through correspondent lending to drive incremental earnings,” said bank spokesman Dan Frahm. “We have no plans to change this approach.”
During a 2Q earnings teleconference Tuesday, B of A president and CEO Brian Moynihan stressed the importance of retail originations. He noted that the consumer mortgage business is focusing on better serving the bank's customer base.
"That's how we are going to run the business to benefit our customers -- making sure every ounce of capital is used to support that core customer base,” Moynihan said.
But he also mentioned correspondent lending. "We continue to shape our view of what the correspondent business looks like," the CEO said.
The BofA spokesman said the company continues to "evaluate changes to our home loans business based on the various reforms, regulatory changes and capital requirements going into effect to make sure we have the best result for our shareholders in deploying their capital."
In the first quarter BofA ranked second nationwide in correspondent lending with $27 billion in acquisitions. However, its volume fell by 18% while the number one ranked correspondent buyer, Wells Fargo & Co., saw its purchases rise by 13%. National Mortgage News is in the process of finalizing its second quarter correspondent rankings.
