Bank of America: the Best Lender, and the Worst Lender, in the World.
Before the downturn, I worked with a lot of real estate investors and helped them do 1031 Exchanges. A lot of my investor clients wanted to buy properties outside the State of California, but all of the loan agents I worked with couldn’t accommodate them. In 2005 I saw an ad in a real estate newspaper for a guy with Bank of America, realized how big they are and thought, “I bet they can do loans out of state…” Sure enough, they could — and my relationship with them was born.
Over the course of four years my referrals brought him, and Bank of America, over 20 loan originations. In 2009 I realized this guy was struggling, and at the end of the year he told me he had decided to leave the company. He told me that, despite how proactive he is, Bank of America couldn’t effectively fund loans anymore. This had negatively affected his business to the point where his clients were jumping ship and that leaving the company was the only thing he could do to save his reputation in the industry.
These days, when I get a BofA pre-approval letter from a buyer on one of my listings, I have to laugh. It’s to the point, now, where if my seller gets one of their pre-approval letters with an offer on their property I will tell my seller some of my BofA stories from the last year and recommend they counter back that the buyer will get a pre-approval letter from one of my lender contacts. The buyer will be sold on the better rate and lower fees; the seller will be sold on the lack of headaches; everybody wins.
So what are my stories? Here’s my best two:
I had a property go through a 3-month short sale negotiation and about 25 days of a 30-day escrow . As a condition to drawing loan docs, BofA did their final Verification of Employment only to find that, four months ago, the loan officer never asked one of the borrowers if his job was a permanent employment or a temporary contract position. Since he was a contractor, his income was disqualified. Because the other three borrowers qualified on their own (it was four siblings buying a house for their mom…), they could still do the deal. The problem is that they had to start completely over with a new application and the escrow closed four weeks late. The BEST part was the fact that the Closing Coordinator for the short sale (which was also a BofA loan) actually hassled me about asking for an extension. If a video existed of the smoke coming out of my ears at that moment, it would have gone viral.
My most recent experience with Bank of America was on a property that just closed last week — with a different lender. The appraiser didn’t use a comparable property that was a model-match for the subject, directly across the street, that had closed two months before. He then appraised the property for $10K less than the list price which was also the contract price. When I raised the issue, it took 1.5 weeks for the appraisal management company to get back to us and tell us “the appraisal will not be modified.” The selling agent was fantastic; she also let me know BofA was being difficult to work with in other ways as well and asked if my sellers would mind extending the escrow so they could change lenders. We closed a week late, but we closed at the full contract price. What Bank of America couldn’t do in five weeks the new lender did in three.
But I did say that Bank of America is the “best.” To-date, and in my experience, they are the best at short sale negotiations and processing. What used to be a 9-12 month process with them, and even a three-month process at the beginning of last year, has turned into a four-to-six-week process. It’s amazing. They have a fantastic Agent Resource Center online, and the Equator platform makes everything very simple. Best of all, the days of calling and sitting on hold for an hour are gone. Their call center normally picks up the phone immediately when I call; the most I’ve had to wait has only been a couple of minutes. I have two short sale listings currently being negotiated with them, and both are going great!
Another way they are the best is because of their Twitter Team. During the first transaction I described above, I got irritated and actually tweeted about it. Within minutes, @BofAHelp tweeted back and asked if they could help. Their Twitter Team is part of their Operations Department, and they have a LOT of pull. They’ve helped me with two transactions this year, they know all the right internal people to call to make things happen FAST!
I sincerely hope they can turn their loan origination business around soon. I’m sure I’m not the only agent out there who’s had a bad experience with them, and if they get a bad rep with agents it’s going to be a LONG road to get back. Still, I guess recessions are the best for purging the economy of weak business models and offer opportunities to improve. Here’s to continued improvement for all of us!