Bank of America is exiting the mortgage lien release business by entering into an agreement to sell this unit to First American Financial Corp.
Terms of the deal were not disclosed. The deal is expected to close in the first quarter of 2018.
The lien release business is not consistent with B of A's customer-centered strategy, said company spokesman Ferris Morrison. It only handled loans in B of A's servicing portfolio.
Following the transaction's completion, First American will provide lien release services to B of A. The unit's employees will become part of First American's Mortgage Solutions division.
First American started providing lien release services in September 2001.
"We're excited to soon welcome the Bank of America lien release team to First American," CEO Dennis J. Gilmore said in a press release. "The post-closing function is important in today's mortgage lending environment, and this move will enhance the breadth of our post-closing products and services."
First American will pick up significant volume of lien release traffic by adding Bank of America as a client. B of A serviced $267 billion of mortgages for other investors at the end of the third quarter. This is down from $284 billion as of the end of the second quarter, and from $307 billion at the end of 2016.
Most of the reduction in servicing volume is through loan payoffs. Even in situations where B of A retains the borrower's mortgage in its portfolio, the lien on the previous loan must be released before the new one can be recorded. Servicers are subject to enforcement penalties if they fail to release a lien in a timely fashion.