The rumors finally come to fruition; Bank of America has announced they would be exiting the Correspondent Lending business. I couldn't be more disgusted with Bank of America in how they handled this whole situation. The whole announcement was completely fucked from the minute the lower level employees found out about the Bank's decision.
I got a text message from a co worker late last night, my buddy had read a short article in the Wall Street Journal that stated, simply, "According to high placed sources, Bank of America is planning to sell or exit their Correspondent Lending Division." I couldn't find that article last night (in my defense, I was really tired).
When my buddy and I arrived in the office this morning, we found an e mail blast from the President of the Home Loans Division in our e mail boxes (time stamped 1 AM) that stated (again, very simply) Bank of America has made plans to sell or wind down (put out of business) the Correspondent Division. "We do this to further align the to the Bank's core business interests. Furthermore, despite this decision, we will continue to deliver for our customers." Bullshit.
The office just took on an immediate atmosphere of gallows humor. No one was working, business as usual was not the order of the day. My frustration was further ignited when we had an 'All Hands Call' with our Division Chief who said something like the following:
"We didn't want to announce the wind down like we did today, our hand was forced by the Media. Please don't believe what the Media stirs up." Fuck him. Like, the Wall Street Journal was rumor mongering when some high executive in Bank of America told them that they would be shutting down Correspondent. Here's my problem on how this announcement was handled
#1: The Announcement Itself. It says this:
We intend to sell the correspondent mortgage lending division or, if a suitable deal is not identified, we will consider other options, including winding down the correspondent lending business in an orderly manner. At this time, our correspondent lending operations continue business as usual.
The Bank just telegraphed their absolute desire to fire sell Correspondent or they would wind down the business. This frightens the shit out of their employees, everyone I know is updating their resumes. Worse yet, the suddenness of this announcement has given no one time to prepare for unemployment.
#2: The Lies. Our Chief said the Media forced his hand. If the Media didn't report this 1,800 people would find themselves out of jobs when the Bank decided to close the division. What the Bank should have done is told it's employee as soon as an offer was put out to sell corespondent that they were doing so, just so people can prepare for job loss.
They needed to do this for several reasons. Their responsibility to their employees. I know two Account Executives with young families, Tom's wife is pregnant with their first child. Chris has two young kids. Both will find themselves out of jobs after January 1st (the date when the Bank will stop buying loans). They should have been given time to prepare for the job loss. The Bank has a responsibility to their clients who rely on the Warehouse Bank's line of funding to do loans. This division is under Correspondent and will also find themselves out of a funding line, and for several of our clients, our Warehouse is their major source of funding. If they don't find another line soon, they could find themselves out of business.
#3: Killing the Golden Goose. Correspondent is responsible for 50% of the Home Loan's division's net revenue. It was a huge money maker in the old Countrywide days. This unit had multiple Clients who were paying the Bank for losses on legacy loans they sold to the former Countrywide. I work in the department that analyzes and collects these losses, how the fuck are we now supposed to collect on Clients who now have no business relationship with the Bank. What leverage do we have to collect on these losses now? Did they not THINK about that when they decided to wind down our Division?
My frustration and disgust with the Bank has reached a new high. I should mention that my department is safe for the time being, we are (effective immediately) being moved under Legacy Assets and we will continue to collect until, well, they Bankrupt the Countrywide Trust and end all Legacy Asset servicing. That would open a whole new can of worms. My job is safe for now, everyone else is screwed.
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