We noted recently that Bank of America seems to be shrinking its footprint in the national mortgage market.
If you take into account correspondent lending, which the bank has exited, the numbers continue to be eye-catching. As noted by Bloomberg, FBR analysts report that Bank of America’s share of residential originations dropped to 5.6 percent in the fourth quarter from 10 percent in third quarter, yet another sign that the big bank is reeling from its Countrywide purchase.
The bank really has little choice but to shrink right now. It is not in position to really open the spigots until it makes more progressing on working off its backlog of foreclosures and troubled mortgages.
“Capacity to originate loans is being ripped out, and the structure of the industry remains uncertain,” the research note was quoted.
The big winner, as we have suggested, is Wells Fargo. Wells Fargo’s market share rose to a whopping 30 percent from 15 percent in 2007, according to FBR. Smaller firms also appear ready to fill the void, more so than Citigroup and JPMorgan Chase. Smaller firms that will increase loans the fastest, include U.S. Bancorp, BB&T, North Carolina and PHH, according to FRB.
For more:
- here’s the article
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