BANK OF AMERICA WORKING ON QUALITY
Recently Bank of America announced they were going to stop the wholesaling of home mortgage loans. They would no longer, after the first of the year, let mortgage brokers or outside concerns market their mortgage products or provide Bank of America programs (Mortgage Loans). At first, I must admit, I read into this that there would be fewer mortgage brokers out there. Although I have several close acquaintances who are mortgage brokers, here in Lakeland and around other places. These are good conscientious brokers whom I respect highly. They are the exception rather than the rule. My "Knee Jerk reaction" was; it would be a plus for the industry to have fewer mortgage brokers. Some Realtors® think mortgage brokers are only middle-men who only introduce additional costs into the equation.
Dealing with mortgage brokers, for the most part, it would seem, at first glance, they only cause more confusion to the demands of the processor and underwriters. This might be true for some mortgage brokers, but it isn't always the case. I have found out, through the years, mortgage brokers do indeed have a rightful place in the industry. They often provide an array of products that may give more options. As long as the customer is the focal point, and misleading arbitrary assignment of programs isn't greed driven, they can be an advantage in some cases. Just like sub-prime loans provide democratization in the mortgage industry. It is just a matter of seeing the big picture from a different perspective and having options from which to draw.
Bank of America's decision not to continue to wholesale their mortgage programs and products may be a good moral decision to increase the quality of their product and portfolio and maybe even good business sense for the short haul. However, it will tell over time whether it will limit their volume of business. Perhaps their wholesale business isn't as extensive as some other large banks. I don't think this change has anything to do with mortgage brokers because Bank of America has had a good handle on their quality. I suspect that B of A has the least problems than other banks in today's problematic "Sub-prime" foreclosure debacle.
The question is: Will this decision of Bank of America's start a trend and if so, where will it stop? Competition is the driving force of fair pricing. If all banks stop the wholesaling of home loans, will it put the mortgage broker on the endangered species list, what will it do to the checks and balances of fair pricing? Is this change of operation in Bank of America's policy, the first step toward cutting out competition? If this decision of B of A starts a trend and other banks get out of the wholesale loan market, it will eventually take away a lot of competition from the overall scope of things?
The upper echelon of Bank of America would not make a decision on a whim; they are too well organized and smart to do anything to destabilize either our real estate market or the national economic interests. I am convinced that this move is more than just an efficient way of doing away with the competition. At first glance we might think this step to be a progressive move on behalf of Bank of America but for all the other Banks it may be a dangerous path to follow.
Under more carefully scrutiny I cringe to think what might happen to the Real Estate market when the day comes when we have only the banks providing and marketing home mortgages. Hard money lenders may then provide an alternative and then the old usury laws might become attractive again.
Well, perhaps I am going down the wrong road in assuming this will start a trend in the banking industry. Maybe the free market and capitalism will prevail and this will really be a non-issue. In any case, this change of policy might, in fact, be a good thing for Bank of America and a very good business move on their part. After all we all have seen this bank improve their customer service. The strides made by Bank of America over the last couple of years to improve the customer service have been phenomenal, and I applaud them.
Speaking from a vantage point and perspective from which no one can dispute, I am quite satisfied, as a customer, at their progress to improve their customer service. Of course there are some branches, departments and employees that have yet to get the message. But overall the Customer Service at Bank of America has come a long way. These improvements are reflected in their home loans and mortgage programs. I am a firm believer that "Stuff" runs down hill and I am also convinced that things have changed a lot from the top of the Bank of America Building in Charlotte North Carolina and the board room there. It does reflect in the rank and file of their employees.
I truly expect the banking industry and especially a leader like Bank of America, to continue to improve their customer service and in turn it will help us in the Real Estate industry to improve the quality of our work as well. After all we are all in the service business and we should strive to serve our customers with Quality and pride. Remembering it is all about the customer.