Reverse Mortgages: Integration of BofA and Countrywide Almost Complete

image The consolidation of Bank of America and Countrywide’s reverse mortgage business will be complete on April 27, said a statement from Bank of America.  Additionally, on the same day, the company anticipates that Countrywide Bank, FSB will be fully merged with Bank of America.  

The wholesale channels for forward and reverse mortgages will be managed separately but both will operate under the Bank of America Home Loans brand said BofA’s spokesman.

The combination of the two companies makes Bank of America the 2nd largest retail reverse mortgage originator according to data from Reverse Market Insight.  In 2009, the company endorsed 2,731 HECMs and has 9% of the total market share which is up from 5.5% in 2008.

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Bank of America has over 6,100 retail banking offices throughout the US and it will be interesting to see how the company will work that into its retail reverse mortgage business.

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  • Word on the street in FL is that B of A is losing a full 50% of their loans due to appraisal issues…..If my interaction in my local branch is any indication, they have a way to go, despite their numbers which collectively, are impressive in the overall space.

    Me – “Hi, do you do reverse mortgages for seniors?”
    CSR who walks the line while you are waiting – “I know we do reverse mortgages, but I’m not sure if we have them for seniors”

    Oh wow.

    Will be interesting to see how the two big boys fight it out as the year continues…..

  • Bank of America should know that I had to walk away from a reverse mortgage that was about to close April 20th because of $7,000.00 in additional charges. In the mortgage business this is looked on as “The Squeeze” which, in my opinion, places Bank of America in competition with other loan shark businesses.

    Thankfully, my bank also writes reverse mortgages, and I look forward to closing with an additional $5,000.00 capital and without additional charges.

    Something is wrong with management in Bank of America. Loan shark practices will eventually ruin a business’s reputation, and again will result in additional TARP money…at tax payers’ expense.

  • Joseph Patrell,

    I would be interested in seeing the figures you quoted side by side because it does not seem realistic.
    Reverse Mortgages are regulated by FHA and it would be impossible that one bank could charge $7,000.00 more in fees.

    It’s a different matter if you say you will be closing with an additional $5000.00 capital. You need to be careful because the numbers and margins can be played with to make it look like you will end up with $5,000.00 more but actually receiving it at closing is a different matter.

  • BofA called today. Says that the numbers I was told about 50% fall out is way off and that the actual number is more like 25% or less, but that an actual number to use and quote was “proprietary”….so, my sources say one thing and BofA rep says another, you decide! (I’m not sure that one out of four loans lost to appraisals in Florida is anything to crow about, but I guess it’s better than half) regardless, the bank model, regardless of the bank, having reps guess and hope is flawed in my opinion, being a former Gorilla employee!

  • Kevin,

    I don’t think the fall out due to appraisals is anything to do with Bank of America, just the real estate values in Florida.

    All of the wholesalers are kicking files due to inflated values. Also, I don’t know what the “bank model” your referring to is

  • Appraisals are a real issue. I have found that you have to be brutally honest upfront. Homeowners are emotionally attached to their homes and I’m finding in most instances they believe their home is valued much higher than it is in reality.

    I would rather lose the loan upfront than go through the whole application process and lose it after the appraisal comes in low.

    It must be especially tough in Florida.

  • Whats with the BofA bashing? Loans in FL fall out 99% of the due to the value, not ‘loan shark’ practices. Joe Patrell-You claim BofA came up with $7K in additional charges? THEN you say you had the borrower bring $5K to the table to do the deal. So really it looks like $2K in additional charges. What where these charges??? Depending on how you tweak interest rates or Orig. Fees, you could easily make $2k vanish. Personally, I don’t use BofA but I doubt they are as bad as you are trying to make them out to be.

  • Hi,

    Yes I agree with Treverse and other that the numbers doesn't seems to be realistic and it would be good if appropriate or referenced enumeration is provided. $7,000.00 is a big amount…..there are several other banks too…what about them?

    Treverse, you took a real insight for the issue for appraisals and being honest 🙂

    – J

  • The $7000 is probably easily explained if the bank they used did not utilize the FHA insured HECM program. Remember there are banks that originate their own “reverse mortgage”. If the value of the home was $350k, then that will solve the question immediately.

    Just hope the borrower never winds up underwater on that house, because that $7000 might have been worth it.

    Otherwise, an inexperienced broker could have overestimated for taxes (i.e. in NY the mortgage/tax stamps are often left in the GFE automated by the banking software, even thought they should not be charged).

  • The $7000 is probably easily explained if the bank they used did not utilize the FHA insured HECM program. Remember there are banks that originate their own “reverse mortgage”. If the value of the home was $350k, then that will solve the question immediately.rnrnJust hope the borrower never winds up underwater on that house, because that $7000 might have been worth it.rnrnOtherwise, an inexperienced broker could have overestimated for taxes (i.e. in NY the mortgage/tax stamps are often left in the GFE automated by the banking software, even thought they should not be charged).

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