Bank of America late Friday said it would create a unit to handle 1.3 million distressed residential loans, many of which it inherited when it bought Countrywide Financial Corp. in August 2008.
The division will be called Legacy Asset Servicing, and will serve as a repository for tens of billions of dollars in troubled assets, including subprime, alt-A, payment option ARMs, and HELOC products originally funded by CFC and its divisions.
LAS will take the lead in handling defaulted home mortgages, including initiating foreclosure proceedings. It also will manage billions of dollars in claims by investors seeking to force the bank to repurchase bad mortgages.
According to figures compiled by National Mortgage News and the Quarterly Data Report, B of A is the nation's largest servicer of home mortgages with $2.15trillion in receivables, or 13.9 million in units.
Roughly 14% of the bank's servicing is delinquent 30-days or more.
In other B of A news, Bank of America Home Loans said it would exit the reverse mortgage origination business and move the unit's operational resources into "other critical areas serving customers."
"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," said Doug Jones, an executive in BAHL's consumer sales and institutional mortgage services division.
The bank said it will continue to serve the needs of existing reverse mortgage customers and those with loans in process. "We fully understand the critical sensitivity of ensuring that our senior customers are provided with the same level of excellent customer service that we have provided in the past," Jones said.
On Thursday, Bank of America announced the definitive sale of its Balboa Insurance organization to the QBE Insurance Group Ltd. The bank inherited Balboa from Countrywide.
