No-Cost Loans on BoA's Radar Screen

At least one major lender, Bank of America, has a totally no-cost loan on its drawing board, a BoA executive told a gathering of the country's real estate writers in Charlotte, N.C., over the weekend."I know it's a revolutionary change, but I truly believe that's where the market's going," Floyd Robinson said at the National Association of Real Estate Editors' annual conference. Mr. Robinson, who is president of consumer real estate and insurance services at BoA, said the myriad of closing costs and fees now attached to home loans only serve to confuse borrowers, and promised that the bank's no-fee loans would have the same annual percentage rates at those with fees so borrowers could readily see there would be no hidden charges. He also said the big Charlotte-based bank is considering offering to refinance its customers' mortgages without charge. "All they'll have to do is call the servicing department and it's done," he said. BoA thinks it has enough economies of scale and clout with service providers to offer no-cost loans, an executive with the bank said. But even if the bank has to take a loss to originate such a mortgage, he explained, it will be worth it to get customers in the door so it can start building banking relationships with them. NAREE can be found online at http://www.naree.org.