Bank of America (BAC) Looking to Shed Yet Another Mortgage Asset
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Investors are buying shares of Bank of America (NYSE: BAC) early Wednesday as reports this morning suggest the largest U.S. bank is looking to sell yet another asset.
According to the WSJ, BofA may seek to sell it's correspondent mortgage business. The move to sell it's correspondent channel may come as it no longer fits in with BofA's long-term strategy.
Employing about 1,000 people, BofA made the decision to divest the business from four to six weeks ago, sources said.
Notably, loans originated from correspondents totaled $27.6 billion in the first-quarter of 2011, amounting to 47 percent of BofA's total originations. BofA's share in the correspondent market was 24.3 percent, second only to peer Wells Fargo (NYSE: WFC).
BofA has been aiming to shed unnecessary assets in order to strengthen its balance sheet in preparation for more stringent Basel III capital requirements. Earlier this week, the bank affirmed rumors it will sell it's $8.3 billion stake in China Construction Bank Corporation. Last week, Warrent Buffett's Berkshire Hathaway (NYSE: BRK-A) made a $5 billion investment in BofA, acquiring 50,000 shares of preferred stock at $100,000 apiece.
BofA is 1.5 percent higher Wednesday morning.
According to the WSJ, BofA may seek to sell it's correspondent mortgage business. The move to sell it's correspondent channel may come as it no longer fits in with BofA's long-term strategy.
Employing about 1,000 people, BofA made the decision to divest the business from four to six weeks ago, sources said.
Notably, loans originated from correspondents totaled $27.6 billion in the first-quarter of 2011, amounting to 47 percent of BofA's total originations. BofA's share in the correspondent market was 24.3 percent, second only to peer Wells Fargo (NYSE: WFC).
BofA has been aiming to shed unnecessary assets in order to strengthen its balance sheet in preparation for more stringent Basel III capital requirements. Earlier this week, the bank affirmed rumors it will sell it's $8.3 billion stake in China Construction Bank Corporation. Last week, Warrent Buffett's Berkshire Hathaway (NYSE: BRK-A) made a $5 billion investment in BofA, acquiring 50,000 shares of preferred stock at $100,000 apiece.
BofA is 1.5 percent higher Wednesday morning.
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