BoA no fee rate modification program

bali_n · Joined: 03 Feb 2008 Posts: 1 1.72 Dollars($)

I am wondering if anyone is currently on the "no fee rate modification" Mortgage plus program, which was offered by Bank of America in late 2006/early 2007. This program was offered only in the state of Washington. Under the terms of this program, customers can reset to a lower rate if the interest rates for their mortgate fall. Now that rates have fallen to an all-time low, have people had any success in getting their rates reset ?

I called BoA and they offered me a ridiculously high rate, much higher than the market average and way above my current rate. I feel cheated.

Guest

Bali,

I'm not aware as to whether customers have been able to rest their rates as of now. But BOA seems to have expanded this program to 8 other states and the bank has guaranteed it's customers the best deal with respect to interest rates.

evolovik26 · Posted: Mon Feb 04, 2008 8:45 am Post subject:

most of the time a deal like that means the cost of refi is factored into your new interest rate (meaning you get higher then market rate)

Guest

I'm using this No Fee Mortgage Plus program to buy a house that I close on this month. The rate I got was extremely competitive to the market rate but the program in Ohio doesn't have the rate-modification piece you have. I kept looking for the "too good to be true" catch, but I couldn't find one. Its a 30yr fixed, competitive rate, 5% down with no PMI and no closing costs.

larry · Joined: 27 Jun 2007 Posts: 3328 474.49 Dollars($)

Hi,

No Fee Mortgage PLUS seems to be an attractive program. Benefits of this program are No Lender Fees, No Application Fee, No Private Mortgage Insurance etc.

Bit you have said that they offered you "ridiculously high rate". Now much do you owe to the lender? Do you more than the property value?

Best of luck.
Larry

ckalvesmaki · Posted: Tue Feb 05, 2008 7:06 am Post subject:

I got a brochure on this product at a home show. Here is what the NO Closing Cost Loan Does Not Cover

1) Title Insurance
2) Endorsements to title
3) Closing protection letter fee
4) Survey Fee
5) State or City Tax stamps (in PA 1% of sales price or more)
6) Recording fees
7) Prepaids

Frankly, they should name it the No Bank Fee Loan, instead of the no closing costs loan. Eveidently, BofA, does not feel that numbers 1-7 are part of closing costs.

Basically they are not doing anything that any broker can't do.......HOWEVER....I´ve noticed a couple things.

Local BofA branches sometimes set their own rates. This program has no fees but it sometimes has points -- it´s not clear to me that branch people understand this.

evolovik26 · Posted: Tue Feb 05, 2008 7:23 am Post subject:

To above poster competitive rate still doesnt mean that they dont get yeld spread
If your loan ammount is big eough you can get plenty from a small adjustment to the rate such as 1/4 of 1% so the rate may continue to stay comepetitive and because they only cover origination and bank fees they dont need much.
Concider this Example taken of actual rate sheets for yesterday I can make nothing on 5.5% rate and i can make 2 points on 5.875% rate. Now given your senario if the loan is 250k im making about $5000 and giving up the $1000 in fees to the lender and about $500 in other junk i still make $3500 in fees for my brokerage which isnt bad. And I dont get 100% of it. Now the BOA doesnt have to share and they dont have to pay loan fees and they got huge volume. So they make money and give you the loan you want, everyone wins.
Seems the BOA is trying to get a good share of the market after they have droped wholesale and bought Countywide but Im still betting that a broker who isnt greedy and knows what they doing can still outprice them.

Guest

ckalvesmaki - I'm not sure when you got that brochure but if you look at their website, all closing costs are paid even title insurance. You are right only about the prepaids (interest, taxes, HOA). All others are paid or waived. I am closing next week on this and since no escrow is required, I am only bringing a downpayment of 5% and my prepaid interest and HOA.

Guest

"Local BofA branches sometimes set their own rates. This program has no fees but it sometimes has points -- it´s not clear to me that branch people understand this."

I did find this to be true - when talking to a retail branch loan officer, she quoted me discount points higher than the best rate on the website and when asked why, she skirted the question. I ended up calling the 800# on the website and avoided the extra points (i.e. commission?).

charlesarmbruster · Posted: Fri Feb 22, 2008 3:58 pm Post subject:

This thread completely reinforces my belief that brokers always beat banks when it comes to satisfying a client's need.

Volume explains the need for bank financing; brokers provide a very valuable source for informed financial products, and the majority of homeowners simply put the decision-making in the hands of the 'respected' salaried bank loan officer, when they'd be much better off putting their trust in a broker who is compensated only on the transaction and is genuinely working on the borrower's behalf.

I've worked on both sides of the 'fence' -- I'll stay with the brokers, for variety sake -- and, I can help more people.

Guest

I've used a broker before and have gone through a bank as well. I'm not sure how this thread reinforces one over the other. It all depends on the borrower and what they are looking for. I prefer to do my homework and ask for what I want. I knew exactly what I was looking for and didn't need a broker to hold my hand or look for some obscure loan. I didn't even go through a loan officer at the bank branch because I prefer not to pay someone (in one form or another) for a service I don't need. In my case, the bank beat the broker and the brokers I talked to could not meet the bank program in this case.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.07 Dollars($)

Many lenders will advertise something similar to this. But in reality they are just doing a refinance. If Bank of America offered you a higher rate then I shuggest that you shop around. There are many other banks and lenders that you can compare to find better terms.

Guest

Are unamortized points fully deductible in the year in which rate modification is applied to the existing mortgage loan?

larry · Joined: 27 Jun 2007 Posts: 3328 474.49 Dollars($)

Hi Al Kass,

Welcome to the forum.

I don't think that the unamortized points are fully deductible in the year in which rate modification is applied to the existing mortgage loan but you can check it out from your lender and let us know about it.

Best of luck,
Larry

Guest

I took one of these loans out over 2 years ago. The rate I got at the time was 6.35....I have tried 3 times to lower my rate and the bank ALWAYS says that it is not low enough yet!!!!! I feel like BOA are screwing me around.

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