Archive for August, 2011

BofA looks to exit correspondent mortgage business: report

Tuesday, August 30th, 2011 | Finance News

(Reuters) – Bank of America Corp is looking to sell its correspondent mortgage business and the unit's employees could be notified as soon as Wednesday, the Wall Street Journal said, citing people familiar with the matter.

The bank had decided to exit the correspondent channel, which employs more than 1,000 people, because it no longer fits with the long-term strategy for its mortgage unit, the Journal said.

Correspondents fund loans and sell them to larger lenders.

The bank has used the correspondent channel to build origination volume and make money by re-selling the loans to other parties and then servicing them, the newspaper said.

Loans purchased from correspondents accounted for 47 percent of Bank of America's mortgage originations, or $27.4 billion, in the first quarter of 2011, the Journal said citing Inside Mortgage Finance.

Bank of America could not immediately be reached by Reuters for comment outside regular U.S. business hours.

The biggest U.S. bank plans to cut 3,500 jobs in the next few weeks, its Chief Executive Brian Moynihan had said in a memo to staff on August 18, as it tries to come to grips with $1 trillion of problem home mortgages.

(Reporting by Sakthi Prasad in Bangalore; Editing by Vinu Pilakkott)


Oil falls to near $88 on surprise US supply jump

Tuesday, August 30th, 2011 | Finance News

SINGAPORE – Oil prices fell to near $88 a barrel Wednesday in Asia after a report showed U.S. crude supplies unexpectedly jumped last week, a sign demand may be weakening.

Benchmark oil for October delivery was down 45 cents to $88.45 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $1.63 to settle at $88.90 on Tuesday.

In London, Brent crude for October delivery was down 5 cents at $113.97 on the ICE Futures exchange.

The American Petroleum Institute said late Tuesday that crude inventories rose 5.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.2 million barrels.

Inventories of gasoline dropped 3.1 million barrels last week while distillates increased 276,000 barrels, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

Signs of waning consumer sentiment also weighed on crude. The Conference Board said Tuesday that its consumer confidence index sank more than expected in August from July, dropping to the lowest since April 2009.

"The latest readings on consumer behavior underscore the notion that the economy still has an awfully long way to go," energy trader and consultant The Schork Group said in a report.

In other Nymex trading for October contracts, heating oil fell 0.3 cent to $3.07 per gallon and gasoline futures slid 0.1 cent to $2.84 per gallon. Natural gas for October delivery gained 2.1 cents to $3.93 per 1,000 cubic feet.


AT&T vows to bring back 5,000 U.S. jobs if merger approved

Tuesday, August 30th, 2011 | Finance News

LOS ANGELES (Reuters) – Telecommunications giant AT&T Inc, whose proposed buy of T-Mobile USA is under scrutiny by U.S. regulators, promised to bring 5,000 wireless call-center jobs back to the United States if the deal wins approval.

The company has not decided where in the United States the positions will be located, AT&T said in a statement. The jobs are currently outsourced to other countries. The new U.S. employees will be eligible to join the company's unionized workforce.

AT&T also said the merger will not cause any job losses for U.S.-based wireless call-center employees of T-Mobile USA or AT&T who are on the payroll when the merger closes.

Currently, AT&T and T-Mobile have a combined total of 25,000 U.S.-based wireless call-center employees. The company would not comment on how many employees would remain overseas after the 5,000 jobs move back to the United States.

The Federal Communications Commission and the Justice Department are reviewing the proposed $39 billion purchase by AT&T of smaller rival T-Mobile USA, a unit of Deutsche Telekom AG.

If approved as proposed, the merger would concentrate 80 percent of the U.S. wireless market in AT&T/T-Mobile and Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.

AT&T has said the deal would allow it to quickly add capacity to meet growing demand for high-speed wireless service. Rivals such as Sprint Nextel Corp say the combination would hurt competition, while public interest groups have argued it would lead to higher prices.

(Reporting by Lisa Richwine; Editing by Gary Hill)