On Aug. 31, Bank of America CEO Brian Moynihan announced plans to sell or close its " correspondent mortgage unit " to reduce its losses on bad home loans. Correspondent loans often are originated by third-party firms, which then sell them to larger lenders like BofA. If the loans sour, buyers can ask originators to repurchase the debt — presuming that third party hasn't gone under. But in August, Bank of America revealed 27% of outstanding troubled mortgages were correspondent loans, and many of those originators are defunct. The result is correspondent mortgages fueling BAC's $14.5 billion in mortgage losses in the second quarter.