Complaints About Bank Of America Mortgage

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Bank of America Corp., which handles customer service on about 15% of U.S. home loans, has accounted for 30% of the mortgage complaints logged by the Consumer Financial Protection Bureau, according to a new database made public by the federal watchdog.

The level of customer discontent — far greater than at home-lending rivals Wells Fargo & Co. and JPMorgan Chase & Co. — reflects BofA’s struggles since its 2008 acquisition of Countrywide Financial Corp. in Calabasas. Countrywide had become the No. 1 mortgage firm by specializing in subprime and other high-risk loans.

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BofA, which has recorded tens of billions of dollars in losses on Countrywide loans, was the object of 15, 136 mortgage complaints since December 2011, when the consumer bureau began taking complaints about home loans.

Two-thirds of the complaints involved BofA’s handling of loan modifications, debt collection and foreclosures, a fact the bank attributed to the concentration of toxic Countrywide loans. An additional 20% involved customer-service problems, such as the handling of payments and escrow accounts for funds used to pay taxes and insurance.

Bank analyst Nancy Bush, a contributing editor to SNL Financial, said the complaint data “enforces what we already knew — that Countrywide was a hot mess.”

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“The lack of infrastructure at Countrywide left Bank of America in the lurch from day one when it came to enacting the tsunami of directives that came at them [from regulators] after the meltdown, ” Bush said.

The regulators were responding to a huge problem, the consumer bureau numbers show. All told, the bureau listed 50, 457 mortgage-related complaints as of Thursday, more than half the total 90, 000 complaints it has received about all financial products and services.

The bureau — created in response to the financial crisis — previously made available a database of complaints about credit cards; on Thursday it added complaint data on student loans, bank accounts and other consumer loans.

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“By sharing these complaints with the public, we are creating greater transparency in consumer financial products and services, ” the bureau’s director, Richard Cordray, said in remarks prepared for a meeting in Des Moines. “The database is good for consumers, and it is also good for honest businesses.”

“As a result of the Countrywide acquisition, Bank of America became the largest mortgage servicer at the peak of the housing crisis, and the servicer of a disproportionate share of loan types impacted by the economic downturn, ” the bank said.

“While we make every effort to provide a good experience for all customers, the servicing of mortgage loans in delinquency or foreclosure predictably results in more frequent customer concerns, ” the bank said.

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Bank of America is the second-largest provider of mortgage customer service, which involves bookkeeping, billing, collecting payments for distribution to mortgage owners and investors, and dealing with distressed borrowers and foreclosures.

No. 1 is Wells Fargo, which according to National Mortgage News serviced 21.5% of all U.S. home loans as of Dec. 31. The San Francisco bank accounted for less than 16% of total mortgage complaints. As with BofA and other major mortgage companies, most involved foreclosures and loan modifications.

JPMorgan Chase, with a 12.7% share of the servicing business, accounted for 10% of the complaints. Citibank, the fourth-largest servicer with 5.2% of the business, accounted for 4.8% of the complaints, while No. 5 U.S. Bancorp, with a 2.9% market share, generated 1.7% of the complaints to the consumer bureau.

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BofA Chief Executive Brian Moynihan has taken a knife to the mortgage business in his efforts to downsize his Charlotte, N.C., bank into a leaner, more profitable business. BofA no longer makes mortgages through independent brokers and no longer buys them from smaller mortgage bankers.

Moynihan also has been selling chunks of the mortgage-servicing operations, which include collecting payments on loans that have been sold as well as those in its portfolio.

“If we needed an object lesson in the perils of excessive growth, Countrywide provided it, ” said Bush, the bank analyst. “Let’s hope the regulators remember.”

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E. Scott Reckard is a former staffer writer who covered mortgage, housing and banking issues for the Los Angeles Times’ Business section.A white circle with a black border surrounding a chevron pointing up. It indicates 'click here to go back to the top of the page.'

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Bank Of America: Complaints, Customer Claims, Free Resolution Services

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Our experts answer readers' home-buying questions and write unbiased product reviews (here's how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.

The bottom line: Bank of America is a good mortgage lender for borrowers who have a decent credit score. It also has a few strong programs to help first-time buyers afford homeownership, including its new Community Affordable Loan Solution, which lets borrowers get into a home with zero down, no closing costs, and no minimum credit score. Bank of America is featured in Personal Finance Insider's guide to the best mortgage lenders.

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You can enter your purchase price, down payment amount, and zip code to see a more customized rate. But take the personalized rate with a grain of salt, because the site won't let you enter your credit score. All rates in the chart assume a 740 credit score or higher.

Fairway Independent Mortgage Corporation offers more types of home loans than Bank of America, so it might have what you need. But Bank of America is the clear choice if you need a HELOC.

Fairway is a worthwhile option if you have a low credit score, or none at all. Fairway lets you apply with alternative credit data, such as proof of paying bills on time, rather than strictly considering your credit score. Bank of America does accept alternative credit data on one of its products, the Community Affordable Loan Solution, but you'll need to be a low-income, first-time homebuyer in a designated market to qualify.

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You may prefer Bank of America if you qualify for down payment assistance. Rocket Mortgage doesn't offer any types of homebuyer grants.

But Rocket Mortgage is a good choice if you want a specialized mortgage term, as it offers terms as short as eight years.

Bank of America services loans in all 50 US states and Washington, DC. It also has branches in 36 states and DC.

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Bank of America recently announced its new Community Affordable Loan Solution, which is a zero-down, zero-closing-cost mortgage aimed at first-time homebuyers in designated markets. These markets include some historically Black and Hispanic neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami. This mortgage requires no mortgage insurance and has no minimum credit score requirement. To qualify, borrowers will need to show proof of timely rent, utility, phone, or auto insurance payments.

If you're already a Bank of America Preferred Rewards client, you could receive a $200 to $600 discount on your loan origination fee.

Bank of America also has homebuyer assistance programs that vary by state. You could receive thousands of dollars toward closing costs or a down payment if you qualify.

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To speak with customer support, call Monday through Friday from 8 a.m. to 10 p.m. ET. Or call Saturdays from 8 a.m. to 6:30 p.m. ET.

The Better Business Bureau gives Bank of America an A+ in trustworthiness. A strong BBB grade indicates a company responds to customer complaints effectively and is transparent about business practices.

Is Bank of America a good bank for mortgages? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

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Bank of America requires a 620 credit score or higher for its mortgages (depending on which type you get), so it could be a good fit if you have a decent credit score. It might also be a good lender for current Bank of America customers, because you'll receive a discount on your origination fee.

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