Lessons learned, BofA makes a new mortgage push
On Thursday, the bank sketched out plans for regaining some of the ground it has lost in home lending. That's a change from the strategy of the last few years, when it has concentrated on shedding the parts of its mortgage business that it saw as undesirable.
Under its new approach, the bank is targeting people who are already customers. It also wants to focus on making loans directly to borrowers, rather than buying mortgages from other lenders. The restraint is a sign that the lessons of the financial crisis, when risky mortgages tarnished the bank's reputation and its results, are still fresh.
“We need to really focus on people that we are very comfortable with,'' CEO Brian Moynihan said in a call with analysts.
Bank of America has been dealing with the fallout from soured mortgages made before the financial crisis for years now. Thursday brought another reminder, when the bank said that fourth-quarter earnings shrank because it had to take big charges to settle two mortgage-related disputes.
Even so, the bank knows that the housing market, in many respects, is improving. It doesn't want to miss out on a boom that could provide a steady source of revenue.
Housing prices are rising in many parts of the country. On Thursday the government reported that home builders broke ground on homes last month at the fastest pace since 2008. Low interest
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