Bank of America Home Loans is getting out of the reverse mortgage business.
In November 2006, the Calabasas, Calif.-based lender launched its reverse lending unit. The move was bolstered by the mid-2007 acquisition of 12-year-old Seattle Mortgage Co.’s reverse mortgage business, which operated at Reverse Mortgage of America.
Its 2008 acquisition of Countrywide Finance Corp. further strengthened is standing in the sector.
BofA originated around 13,000 home-equity conversion mortgages during 2010, according to data from Reverse Market Insight. HECMs are reverse mortgages that are insured by the Federal Housing Administration.
But on Friday, the lender disclosed plans to shutter the business.
Loans in process will be closed, and BofA will continue to service existing reverse mortgages.
“We made the strategic decision to exit the reverse business due to competing demands and priorities that require investments and resources be focused on other key areas of our business,” Doug Jones, consumer sales and institutional mortgage services executive, explained in a statement.
The news release indicated that reverse lending resources will be channeled “into other critical areas.”
Impacted employees who are not re-assigned will have the opportunity to apply for open positions in other divisions.
Yesterday, BofA announced the sale of Balboa Insurance.
