By Jonathan Stempel
NEW YORK (Reuters) - Bank of America Corp. (BAC.N: Quote, Profile, Research, Stock Buzz) on Monday said its new no-fee mortgage product has triggered a jump in applications to buy homes, and that it plans this year to develop products to attract U.S. homeowners who need or want to refinance.
Speaking at the Reuters Real Estate Summit in New York, Floyd Robinson, Bank of America's president of consumer real estate and insurance services, said the pace of mortgage applications is up 40 percent from a year earlier, after adjusting for changes in overall market activity.
Introducing "market changing" products is one way the Charlotte, North Carolina-based bank tries to get customers in the door and then sell them more products. Last fall the bank began to eliminate online stock trading fees for customers who kept at least $25,000 on deposit.
Robinson said the bank's average mortgage customer uses an additional 5.6 products -- such as checking accounts, credit cards or home equity loans -- within two years.
"You have to have a product like No Fee Mortgage PLUS which is so market-changing, that you begin to drive people to you," Robinson said. "We're doing some market tests (on refinancings) to determine what we want to do that could, to some degree, move the market in a way the purchase product has. We really need to figure out what resonates with our customer base."
He told Reuters TV that such a refinancing product could be launched "by the first of next year at the latest."
Borrowers with hundreds of billions of dollars of adjustable-rate mortgages are expected to see rates reset higher this year and next. Moody's Economy.com said $450 billion of these loans will be "subprime," or lower quality.
Bank of America's $167.5 billion of mortgage originations in 2006 ranked sixth nationwide, according to National Mortgage News. That trailed Countrywide Financial Corp. CFC.N, Wells Fargo & Co. (WFC.N: Quote, Profile, Research, Stock Buzz), Washington Mutual Inc. (WM.N: Quote, Profile, Research, Stock Buzz), JPMorgan Chase & Co.'s (JPM.N: Quote, Profile, Research, Stock Buzz) Chase Home Finance and Citigroup Inc.'s (C.N: Quote, Profile, Research, Stock Buzz) CitiMortgage. Continued...
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
