Bank of America, which stunned the mortgage industry Tuesday by exiting the wholesale channel, says the credit quality on its broker-source loans is quite good, but it will exit the channel nonetheless.
"In some cases, the credit quality on those loans is as good, if not better than on our retail loans," a B of A spokesman told National Mortgage News.
In years past, poor wholesale/broker quality has been cited by some funders as a reason for leaving the channel.
The spokesman also said the bank, at this time, cannot quantify how many wholesale account executives will lose their jobs due to the shuttering of the channel.
In total, wholesale production by B of A employs roughly 1,000 workers, 850 of which work in fulfillment and processing.
The bank anticipates needing many of the 850 for a planned expansion of its retail and correspondent channels. The 150 sales/AE workers will be allowed to reapply for new jobs at the company.
Brokers had a mixed view on B of A's exit from the channel. Some interviewed by NMN said the bank had cut back so much recently in the channel they didn't send deals to them anymore.
One Colorado broker said, "I can't believe brokers were dumb enough to do business with them in the first place."
Many believe the bank will not be able to compensate for the loss wholesale volume by an expansion into the other channels.
