Bank Of America Overwhelmed By Refinancing Demand

A new government program to boost mortgage refinancing is overwhelming some banks such as Bank of America. That bank has been telling some customers to wait 90 days before applying for a refinance.

Banks have to staff up to handle refinancing demand. Banks are loathe to hire more staff so they keep mortgage interest rates a little higher than normal to discourage demand.

(Bloomberg) — Bank of America Corp., struggling to handle mortgage refinancing after a U.S. program boosted demand, is telling some customers to wait 90 days before starting an application, said two people with knowledge of the policy.

The firm began a reservation system last week that asks those who call during high-volume times if they wish to be contacted again in 60 to 90 days, said two people who requested anonymity because the measure hasn’t been announced. Wells Fargo & Co. and New York-based JPMorgan Chase & Co., the biggest U.S. mortgage lenders, said they aren’t stalling customers.

The delays may push borrowers to other lenders or discourage them from taking advantage of record low interest rates. The government’s Home Affordable Refinance Program, which helps homeowners lower payments, has increased refinance applications and strained capacity at Bank of America, which exited some mortgage lines last year. The U.S. program, now dubbed HARP 2, was broadened in 2011 so more people qualify.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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