Bank of America is splitting its mortgage business into two units, with a new division created specifically to handle foreclosures and discontinued loan products. The new unit, Legacy Asset Servicing, will be charged with resolving issues involving faulty paperwork that had led the bank to temporarily suspend foreclosures across the country for nearly two months in October. The new unit will also handle mortgage modifications and buyback claims on bad loans sold to investors.
The move is the latest in a series of management shifts since Brian Moynihan took over as CEO in January 2010.
Bank of America Home Loans will continue to handle new loans and the servicing of loans, or collection of monthly payments, that are up-to-date. It will be continue to be led by Barbara Desoer, who has run the unit since 2008.
Bank of America wrote $306 billion in new mortgages in 2010 and completed more than 775,000 permanent loan modifications, including more than 100,000 through the Home Affordable Modification Program (HAMP).
Bank of America Home Loans lost $8.92 billion in 2010 and has been battered by a stream of lawsuits, mostly focused on bad loans it acquired when it purchased Countrywide in 2008.
Separately, the company said it will exit the reverse mortgage origination business and shift the staff from that business to other mortgage operations. Customers with pending reverse mortgage loans will be allowed to continue through the process, and the existing loans will remain in force. The bank has about 100,000 existing reverse mortgages outstanding.
Tags: BofA, mortgage unit, mortgage business, loan products, mortgage modifications, loan modifications, hamp, countrywide, reverse mortgages
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