The once gigantic mortgage activity of BofA is now listed under “Other Revenue”


April 16, 2018

A measure of how things have changed over the past decade at the Bank of America Corp .: the company has stopped reporting its mortgage business commissions.

The revenue line that once regularly exceeded $ 1 billion per quarter is now so small that on Monday the company has amassed it in “all other revenue” from its consumer bank. The lender simply said that the mortgage banking revenue was “lower” in the first quarter.

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After billions of fines and payments to regulators and investors in the years following the financial crisis, Bank of America has moved away from the securitization and service of residential mortgages. The company generated $ 9.4 billion of new mortgages in the first quarter; in 2009, it exceeded $ 100 billion in one quarter. Other financial companies, such as Quicken Loans Inc., are taking a step back when traditional lenders retire.

CEO Brian Moynihan told analysts that while taxes are no longer important, the business is still there. The bank still earns a lot of interest income from home loans as it keeps more of them on its budget.

But the business of making loans to sell them – the specialty of the subprime lender Countrywide Financial Corp. that Bank of America bought in 2008 – has become largely a relic. The lender has also stopped declining gains on the sale of debt securities, and the amount of loans is 90 percent lower than in 2009.

Mortgage banking income ended its run as a separate line on a negative note: including provisions for payments to investors, the last two quarters of 2017 were negative.

 

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