WSJ has been all over BofA’s exit from the mortgage banking channel. They broke the story last month, and this weekend they broke the latest: Fortress Investment Group’s Nationstar Mortgage buy the BofA unit if negotiations hold up. Still interesting BofA considers this channel “non-core” when it accounted for 47% of the bank’s total mortgage [...]

Did you know that Bank of America kept the Countrywide name after its bargain purchase in 2008, and that “it would consider putting the unit into bankruptcy if litigation losses threaten to cripple the parent”? Here’s the alphabet soup of entities BofA is juggling:

The WSJ reported last night that Bank of America is exiting their correspondent mortgage lending business which buys loans from mortgage banks. WSJ and Inside Mortgage Finance said BofA had 24.3% market share in correspondent lending, second to Wells Fargo, and BofA’s correspondent channel made up 47% ($27.4b) of the bank’s 1Q2011 mortgage originations.

Remember that proposed $8.5 billion Bank of America settlement with investors back in June? “Not so fast,” said the FDIC. The settlement still requires a judge’s approval, and the FDIC filed an objection in federal court in Manhattan as an investor rather than as a regulator of the Bank of America. It said it owns [...]

Today Henry Blodget examines why Bank of America is getting hammered. Most telling is this statement:

Has U.S. government debt become a safe haven for its own downgrade? Some think so since mortgage (Fannie & Freddie) and Treasury bonds still look ok relative to other global options, but that theory has yet to play out.

Comparing performance of Bank of America vs. Wells Fargo is interesting study, and is much more than an $8.8 billion loss compared to a $3.95 billion gain.

JPMorgan Chase weighed in with 2Q earnings results, the first of the “big boys” that smaller mortgage banks follow closely. The company had net income of $5.4 billion on revenue of $27.4 billion, up 7% from the prior year. Here’s an excerpt on their mortgage business:

Bank of America is near an $8.5b settlement with a group of non-agency investors on rep-and-warranty-related issues: 226 deals, of which 15 are re-REMICs. The remaining 211 deals have a current balance outstanding of $79 billion and original balance of $178 billion. As such, the $8.5b of settlement translates into 10.8% of the current balance [...]

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