UPDATE 1-IBM buys Bank of America mortgage servicing unit

* Terms of deal undisclosed

* Unit bought by Merrill Lynch for $48 mln in 2004

NEW YORK Oct 5 (Reuters) - IBM (IBM.N) said on Monday it signed an agreement to buy the core operating assets of Bank of America Corp's (BAC.N) mortgage servicing unit Wilshire Credit Corp.

International Business Machines Corp said it will acquire Wilshire's 900 employees in the deal but it did not disclose terms.

The Wilshire business will become part of IBM's Lender Business Process Services unit, the company said in a statement.

Merrill Lynch & Co Inc, acquired by Charlotte, North Carolina-based Bank of America on Jan. 1, bought Wilshire Credit Corp for about $48 million in 2004. (Reporting by Elinor Comlay)