Bank of America will exit its correspondent mortgage business in a move that underscores the failure of its 2008 deal to buy Countrywide Financial, reports said Wednesday. Through the correspondent mortgage business, large banks like Bank of America purchase loans from smaller lendors.

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This move comes after a series of tactics on the part of the bank to boost investor confidence. Famed investor Warren Buffett last week injected the bank with a $5 billion "fairy dust" investment. Bank of America, it was also reported earlier this month, is in the process of laying off as many as 10,000. Bank of America is also selling a $8 billion in shares of a Chinese company. Ditching the correspondent mortgage business means cutting about 1,000 jobs, according to Reuters.

The deal with Countrywide exposed Bank of America to an overload of bad loans. The Wall Street Journal reports that loans originated by correspondents accounted for nearly half of its mortgage originations in 2011.

Meanwhile, Reuters reported Tuesday, the bank knew about the threat of a lawsuit from American International Group (A.I.G.) for seven months before disclosing it to investors.

Reach Ryan Faughnder here.