Announced around 2:00 Central Time today....
Bank of America is closing down their whole lending department.....Cutting 3000 jobs.... Plans to focus more on their retail division.
As I was communicating with one of their wholesale reps last night and this morning, I can assure you that they didn't see this coming!!! My rep had a big meeting this morning and was to get with me this afternoon. I got the news before she could....
BofA's Whosale Lending dept was pretty poor anyway. It took 3 times longer to get files thru their system than it did with other banks at times. Although, they did have some pretty cool products and pricing. Their retail division is a smoother operation from what I hear.
Look for a new set of feet on the street as these jobs cannot all be absorbed in other divisions.
What does this mean for Realtors? It means that your mortgage broker/banker just lost a few good tools(even though most of their rates and programs overlap with many banks). BofA still offers many loans through their Retail Branches. One good Retail Loan Officer in the Dallas, TX area is Ken Stampe.
Official Broker Communication <= This is the announcement to brokers. But there were other snippets of info on Bloomberg and others about the profitability of the Business Unit.
Tom Burris
DallasLoanGuy.com
Dallas, TX
"A Home Loan For Every Texan"
I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!! Subscribe to my blog and stay informed about current lending changes!!
LOL Brett
There are a LOT of bad ones..... So I understand.
Were were discussing yesterday how she wanted to sign up my bank and give us delegated underwriting..... then this.
Donna:
I have sent 2 people to Ken this month alone.... Which should speak volumes about the respect that I have for his abilities.
Candy:
Hi. I have used them for their niche products. They were very slow moving in the wholesale division. Maybe Ken can clarify the difference in his division, but I think his deal is a little smoother.
Marchel:
Wholesale = I originate the loan and send(broker) the file to them for underwriting. Closes in their name and I get a commission.
Retail = They have THEIR employees originate the loan and send to underwriting..... ect
Originate = get the referral and make a loan application out of it.
I will ask Ken to respond.... he understands the difference better than myself since he works there. I send him biz for the niche loans they have.
It came as a surprise to us in retail as well. I think it is an ultra-conservative move on the part of the bank but it coincides with Bank of America just being recognized as the largest retail lender for 2nd quarter 2007. In my personal opinion, not that of the bank, this is more about protecting the brand and growing the retail channel then anything else. Unlike Countrywide (who I worked for for 4 years) who grew their portfolio of loans moreso through their wholesale and correspondent channels then retail, Bank of America is predominantly a retail lender.
Marchel, I'm going to guess that the service issue you described was a result of your client going into a banking center and dealing with a personal banker, not a mortgage loan officer. That's not the customer's fault and sometimes it can be a challenge for us. The personal bankers, in addition to opening checking and savings accounts, etc. also offer some of our mortgage programs, but not all. They also are limited on purchase transactions in my opinion because they do not have personal voicemail, nor can they receive email attachments. For many loan transactions, the personal banker puts the loan together and hands it off to a loan processor who calls the customer to follow-up and take care of processing the loan. Sometimes, if the customer has questions or needs extra information before agreeing to put the loan on the system, our personal bankers may not be as accessible by phone and email. Again, not anyone's fault but in some cases poses a challenge.
The bank has mortgage loan officers like myself and others who do nothing but mortgage loans. We do have voicemail and operate like a traditional mortgage loan officer. In fact, many people are surprised to learn that we do not get our customers from the bank but rather on our own relationship efforts just like Tom Burris does. We are also both 100% commission in compensation.
I think this has very little impact at the consumer level, although I admit it reduces a couple of niche programs in the mortgage broker's arsenal. The average consumer I don't believe went to a mortgage broker and said, "hey, give me that Bank of America loan". I suspect the mortgage brokers will still have a diverse enough platform to place their customers in good mortgage loan programs.
I think it will hurt some brokers more than you believe. Some of the BofA niche programs are an integral part of some broker's marketing.
But, you are exactly correct on the personal bankers... I have visited with them at MY bank(wamu) and they are offering me crap that they don't even understand.
If the consumers avoid the branch and get referred to Mortgage Loan Officers like you(Ken), then they will be ok. Maybe the bank should think about that.
Ok, I received notice of this sometime this morning and I have a few things to say...
1. B of A had great wholesale programs - these programs ARE available elsewhere
2. B of A had HORRIBLE service - It ALWAYS took much longer to close loans with them
3. B of A had very good pricing - This pricing was NEVER worth the relationships that their service may cost you (some may disagree with me)
4. Bank of America had EXCELLENT Account Executive's - They were great at getting business in, only to be screwed up by the internal machine!
5. My branch didn't send business to them unless it was absolutely necessary - they were truly horrible in the back end.
I was going to include my goodbye email to my AE that praised her but I decided not too...
Tom, when are we doing lunch?
John: Pretty much nailed it. Lunch is next week. I have parent/teacher today
Sharon: I heard that the coorespondent relationship was better..... but I only sent them the LMI loans which are not available with delegated underwriting. I loved my rep too!!
Tom... I never used B of A but knew they had possibly 2 programs that I can't really do elsewhere. Other than that, just another piece of the pie that is crumbling. I never dealt with their wholesale side, but it sounds like WAMU. We me had loan officer's always screaming to use WAMU because their rates were the best. But it took forever to close them, costing money on our warehouse lines.
As someone else mentioned, they are just being conservative and yes, they don't trust outside brokers at this moment. People fail to realize, a broker doesn't have much to lose when they aren't dealing with their own money.
Overall, as you mentioned, too many jobs lost that won't be absorbed in today's market. Not with all of the other layoffs and other lenders going out of business. As I have said many of times, I don't want to see anyone lose their jobs, but I like the correction. We needed this a long time ago. There were just too many people in this industry. The strong for the most will survive.