Sunday, December 12, 2010
Bank of America Shifts from Origination to Modification
In an effort to deal with the massive influx of loan modification applications and the new, more stringent regulation and supervision of these modifications and approvals, Bank of America is cutting down the size of its loan origination department in favor of altering the state of existing loans instead. Loan originators, who help lenders determine qualifications for mortgages and assist borrowers in obtaining new loans, have had far less to do lately thanks to strict credit requirements and hefty, mandatory down payments. However, since loan modification essentially involves creating new terms for a loan, loan originators are entirely equipped to do this job as well, argues BofA. “The integration of these experienced mortgage professionals will provide Bank of America with a significant surge in servicing capacity,” explained on BofA representative via email.
The lender plans to move around 2,500 employees out of origination and into modification and allow them to remain there for “the majority of 2011.” With the addition of new hires, this will triple BofA’s default service staffing level. BofA also officially assured customers seeking mortgages that their needs will be met quickly and effectively in 2011. Unfortunately, for now, there are just far more modifications needing to be addressed than new loans to be made.
This move reminds us of recent geoplitical events that resulted in our troops being redeployed from Afganistan to Iraq. One can hope the results are more favorable for homeowners.
Posted by Berel News