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In response to a terrible performance in the third quarter, Bank of America (BAC) is getting out of the wholesale mortgage business, cutting down on investment banking and getting rid of about 700 jobs there. The 700 job cuts are part of the larger strategy which will eliminate about 3,000 jobs overall before the company is through.

Some employees in the wholesale mortgage business will be given chances to apply for open positions in other areas of the company.

Bank of America CEO Ken Lewis is said to be outraged by the poor performance and earnings, and a number of key leaders in the company are gone or will be going soon.

Peter Forlenza just left the bank, who was the co-head of equities. He's been with the bank since 2002. Others recently leaving have been Chris Hentemann, who was over the global structured products unit, and Gene Taylor, head of the global corporate and investment banking unit, who is scheduled to retire by 2008.

"When Ken talks about a top-to-bottom review in five days time, you can't make that happen. These cuts were in the works, and expect more," said Tony Plath, an associate professor of finance at the University of North Carolina at Charlotte. "Don't underestimate the depth of Lewis' disappointment in earnings. This guy is pissed."

As far as the retail strategy goes, the bank is offering a new product, first introduced in May, which eliminates fees connected to third-parties, lenders and borrowers, which added several thousand dollars to the cost of the loan. The results, according to the bank, have been strong so far, with applications for loans of over $50 billion in business have occurred over the last six months. It has helped them gain significant market share in the space.

Lewis has been pushing over the last several months for the bank to increase its prime mortgage market share, which are loans offered to those with strong credit ratings. Industry insiders say they haven't fully engaged this market yet, and there is room to grow.

As of the quarter ending September 30, the bank held a home mortgage portfolio of $274 billion and has a goal of doubling that over the next three years, which now is a 5 percent share of the market.

The company plans, as we talked about earlier, to make this their major focus for the foreseeable years ahead.