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Old 06-25-2007, 09:33 AM
 
4,797 posts, read 11,977,283 times
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Quote:
Perhaps their opinion will change when they realize why BoA willingly makes nothing on each of the "Mortgage Plus" loans they originate
I highly doubt they are not making any money on these mortgages.
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Old 06-25-2007, 10:14 AM
 
Location: Katy-zuela
4,852 posts, read 8,996,558 times
Reputation: 2364
Best bet: Never go to a big bank again. Banks like WaMu and Chase act the same with outlandish fees and mediocre service. Try a credit union or a small community bank, preferably the credit union system since they are the least likely to merge into big banks. I guess you didn't have enough money in the Advantage Checking to qualify for their freebies and best customer service. How did you get involved with them? Did your small community bank merge?
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Old 06-25-2007, 12:17 PM
 
Location: Raleigh, NC
178 posts, read 1,143,062 times
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"I highly doubt they are not making any money on these mortgages."

That was my opinion too until I talked with other brokers across the country about their experience. Based on what they've said, it seems legit that BoA is intentionally losing money on the origination in order to build their client database. Here's a bit more info I found...

Floyd Robinson said the company is able to offer "a true no-fee mortgage product" in part because of its sheer size -- $1.5 trillion in total assets, 55 million banking customers nationwide, and a nearly $350 billion portfolio of first and second home mortgages. That size allows it to create cost efficiencies and take over certain responsibilities that smaller institutions cannot.

For instance, the no-fee program allows down payments as small as 5 percent for conventional mortgages up to $417,000 -- and even lower for certain "jumbo" loans up to $3 million -- without private mortgage insurance premiums. The bank intends to keep all or most of the no-fee loans in its portfolio, Robinson said in an interview.

"We are the investor, and we assume the risk" of defaults or foreclosures on loans with low down payments. Rather than requiring borrowers to pay monthly mortgage insurance premiums, the bank is self-insuring the risk and charging customers nothing for the service.

Sensitive to any suggestion that the new program loads nominally waived fees into the interest rate, Robinson said "our rates are very competitive" with other lenders who charge all the usual fees. Competing brokers or lenders might be able to quote slightly lower note rates, he said, but when shoppers look at the truth-in-lending annual percentage rate disclosure -- where all the loan costs are factored into the effective rate being charged for the loan -- "we are confident that we will have the best deal."

BoA says it is so certain that its no-fee deal stacks up well against competitors' rate-plus-fee offerings that it is urging applicants to comparison-shop, with BoA's quote in hand, before making a final commitment. If an applicant who is approved by the bank for a no-fee loan chooses to close with a competitor, the bank promises to pay that applicant $250.

The new program comes with none of the traditional mortgage and settlement charges -- application fee, appraisal fee, credit, underwriting, processing, title insurance, title search, private mortgage insurance, flood certification or closing fees

The no-fee package also comes with a 25-days-or-fewer closing guarantee. And the bank says that if the closing occurs after the deadline, it will pay the applicant's first month's worth of principal and interest.

Some limitations Bank of America includes in the fine print:
You can't apply unless you already have an account with the bank. State and local transfer taxes, property taxes and other government levies are not covered by the no-fee guarantee. Neither are prepaid interest or discount points, hazard or flood insurance, or homeowner association fees. The program is solely for home purchases for primary or second properties. Refinancing isn’t allowed.
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Old 06-25-2007, 02:12 PM
 
Location: Old Town Alexandria
14,505 posts, read 23,781,794 times
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When asked about the no-fee mortgage program, Floyd Robinson, Bank of America's president of consumer real estate and insurance services said, "this is about a relationship more so than about a single product sell. We are here to build relationships, to become the trusted adviser for the customer." Bank officials say they typically are able to cross-sell 5.3 additional products for every mortgage customer.
_____________________________

That is just marketing promo for their website. No mention there about their "opportunity card" for people with no SS# given out freely at +25% interest rates so when those cards default everyone else can just pay higher rates.
"Building relationships" lol. More like fleecing the public.
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Old 06-25-2007, 02:21 PM
 
4,797 posts, read 11,977,283 times
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Wow, that's scary. But

Quote:
"We are the investor, and we assume the risk" of defaults or foreclosures on loans with low down payments. Rather than requiring borrowers to pay monthly mortgage insurance premiums, the bank is self-insuring the risk and charging customers nothing for the service.
So they are saying that they will charge the same rate/apr for a 20% down buyer and a 5% down buyer???

I wonder if this is only available to A++ borrowers??
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Old 06-25-2007, 02:26 PM
 
4,797 posts, read 11,977,283 times
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[quote=_____________________________

That is just marketing promo for their website. No mention there about their "opportunity card" for people with no SS# given out freely at +25% interest rates so when those cards default everyone else can just pay higher rates.
"Building relationships" lol. More like fleecing the public.[/QUOTE]

How is that worse than the deadbeats with SS# who default on their 25% interest rate cards at every lender in the US?

These huge banks are masters at cross selling. They have goals/quotas for every account holder to have 5-8 accounts at their institution.
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Old 06-25-2007, 02:59 PM
 
Location: WA
5,396 posts, read 21,401,588 times
Reputation: 5898
BOA must cross sell to grow because they have such a high percentage of national deposits they are limited by the government in further acquisitions.

I worked for BOA on and off as both an employee and contractor for over ten years. They are very good at some things and pretty inconsistent at others. Overall it is a good company for both customers and employees but there are certainly exceptions in an organization this big.

I closed on a house early this year and the best mortgage deal for me was through a good broker. I had BOA mortgages in the past and was not impressed with their rates or loan administration, but things do change.

A large national bank has advantages for many with its national branch, ATM, and support network as well as a full set of financial service offerings. I happen to use a credit union, online savings bank, and brokerage firm to get the services a large bank can offer, but like the rates and services I get.

Financial services is a competitive industry. I you don't get what you want, ask. I they don't deliver go elsewhere.
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Old 06-25-2007, 04:39 PM
 
3,853 posts, read 11,668,446 times
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Isn't BOFA free? I use them and never paid any fees or service charges.
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Old 06-25-2007, 09:02 PM
 
Location: Old Town Alexandria
14,505 posts, read 23,781,794 times
Reputation: 8838
Lightbulb to clarify....

Quote:
Originally Posted by TimtheGuy View Post
How is that worse than the deadbeats with SS# who default on their 25% interest rate cards at every lender in the US?

These huge banks are masters at cross selling. They have goals/quotas for every account holder to have 5-8 accounts at their institution.

Tim, I am not defending the cardholders- they are mostly illegal and BoA is targeting them for profit.

The American public would be well- served to realize how they are being fleeced. If we start using ethics when we bank....things could change.
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Old 06-28-2007, 08:35 PM
 
Location: Burlington, VT
483 posts, read 1,782,161 times
Reputation: 259
I have "Electric Orange", ING Direct's checking account. It's an online-only account, so you need a computer. It has to be linked to a brick-and-mortar bank account; mine at linked to our joint account.

If you're comfortable with internet banking, it's great. I only go to the bank to get quarters for laundry, and I write one check a month. It pays interest, and you don't have to buy checks. If you need a paper check for something, you can arrange to have one mailed for free (it costs $15 for overnight delivery).

ING doesn't have their own ATMs, but they're part of the Allpoint ATM network. They're mostly in convenience stores and liquor stores, but they're also at Target, Walgreen's, and CVS. Unfortunately, the ATM closest to my job is across a river.
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