After pulling out of the mortgage business two years ago, Bank of America has re-entered it in an attempt to capture a share of the mortgage refinance market, The Wall Street Journal reported Jan. 15.
Following its purchase of Countrywide Financial Corp. in 2008, Bank of America became the country’s top home loan lender. However, the financial crisis and alleged questionable loan practices saddled the bank with billions of dollars in losses, which led it to exit the mortgage business.
Wells Fargo currently is the mortgage leader in the U.S., followed by JPMorgan Chase and U.S. Bancorp. Bank of America now ranks fourth, the Journal reported.
Analysts told the Journal that Bank of America may never regain its mortgage dominance and some expressed skepticism that the bank will see significant profits from low interest rates and federal refinancing programs.
Analysts also told the Journal that Bank of America’s reputation for poor customer service may hinder plans to grow its mortgage customer base.
“What B of A is doing is difficult to pull off,” Guy Cecala, publisher of Inside Mortgage Finance, told the Journal. He pointed out that while the bank has a substantial customer base, most borrowers don’t go to their current retail banks for mortgages.
The bank’s plans, however, include growing its income by selling products to its current customers, and it intends to offer better interest rates to customers who have assets at the bank in excess of $250,000. The bank also hired 4,000 new loan processors to help grow and better service its mortgage business.