Bank of America creates unit for mortgage defaults

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Associated Press

Posted on February 4, 2011 at 5:01 PM

Updated Friday, Feb 4 at 5:02 PM

NEW YORK (AP) — Bank of America Corp. says it is splitting its mortgage business into two units, with one dedicated specifically to handle foreclosures and discontinued loan products.

The Charlotte, N.C.-based bank says this unit will be responsible for resolving issues involving questionable paperwork that led it to suspend foreclosures in all 50 states in October. It will also handle buyback claims on bad home loans sold to investors, and mortgage modifications.

A second unit will handle new mortgage originations and servicing those loans with up-to-date payments.

Separately the company said it will exit the reverse mortgage origination business.

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