BoA's B&C Market Share Tops 19%

Charlotte, NC-Now that Bank of America has closed on its purchase of Merrill Lynch & Co., it finds itself the proud owner of two more subprime servicing platforms: Home Loan Services and Wilshire Credit Corp.

Pittsburgh-based HLS services $47.4 billion in A- to D credits while Wilshire of Beaverton, Ore., has a portfolio of about $25 billion. Wilshire's exact size could not be determined.

Merrill - purchased by BoA in early January - owned both units but for some reason, would not provide a servicing figure for Wilshire.

The $25 billion figure is an estimate, but one mortgage advisor said he thought Wilshire's servicing portfolio - which includes subservicing contracts - could be much larger, maybe as high as $50 billion.

Wilshire, which Merrill bought in 2004, is a subservicing specialist that works on not only subprime, but alt-A and "scratch and dent" loans.

In July of last year BoA bought Countrywide Financial Corp., the nation's largest overall lender/servicer but also the largest subprime servicer.

BoA would not provide a number on CFC's current subprime portfolio. At last check CFC serviced about $92 billion in subprime, but the number is an estimate based on previously disclosed figures.

All totaled, the Charlotte-based bank now has $164 billion in nonprime receivables and subservicing contracts, giving it - by far - the most exposure of any depository in the nation. It's A- to D market share is 19.41%, according to figures compiled by Mortgage Servicing News and the Quarterly Data Report.

BoA's CEO Kenneth Lewis has made it clear he's no fan of the subprime industry. The bank would love to exit the business entirely but there is not much of a market for subprime servicers these days. "Both companies are marketable," said one M&A executive, "but the question is how little would BoA be willing to accept?"

A BoA spokesman declined to talk about its subprime business for this article. A year ago Merrill tried to sell HLS but found none of the bids acceptable.

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