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Funny Business
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If you went to a Countrywide Home Loan Center on Friday and went back this morning, you'd find the same people, but a new name: Bank of America [BAC
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] Home Loans. The signs have been changed-talk about a sign of the times. I've watched the change happen along the 101 freeway through the Conejo Valley over the last few weeks, as building after building which once sported the Countrywide logo has been made over into the Bank of America image.
Even the company headquarters in Calabasas now says Bank of America, as does the sign over the impressive lobby filled with artwork and carpets, where Angelo Mozilo once ruled.
It's kind of weird.
"It's not weird for us," says Barbara Desoer with a laugh. "We're extremely proud of the fact that we have a presence, but that change, over time, is a big one."
Desoer moved here from Charlotte to run the combined mortgage operation as President of Bank of America Mortgage. She actually bought a home in Mozilo's old neighborhood, but the two could not be more different. Whereas he was a self-made man who built the company with sheer grit, brains and bluster, Desoer appears to be a thoughtful, intelligent leader who worked her way up through the ranks. She is the daughter of a General Motors [GM
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] executive who spent her childhood in places like Mexico City and Paris and speaks several languages. Things have changed in Calabasas.
That change isn't just in the new name, but in new products.
Beginning today, nearly all new Bank of America mortgages will come with a "Clarity Commitment", a one-page summary of the terms of the loan, written "in simple English". It will summarize how and when an interest rate may vary, the most a payment will ever be, and the exact total of closing costs. "The voice of the customer is what drove us," Desoer says. But the Clarity Commitment doesn't provide any legal protection for the lender-"it's not a legal document"-meaning borrowers are still responsible for reading through the massive mortgage packet. Still, the one-page summary should cut down on surprises. It's a clever idea that someone should have thought of before--unless being vague was part of the plan back during the housing boom, when loans changed hands quickly, and home prices were supposed to go up forever.
Bank of America today is also introducing a new "Flat Fee Mortgage Plus", which, depending on what state you live in, fixes closing costs to between $1,995 and $2,995.
This only applies to purchases, not re-fis, of 30-year, fixed rate conforming loans.
Finally, Desoer says if a borrower can find a better loan somewhere else, Bank of America will pay that person $250. I asked her what defines a 'better' loan-is it a lower total cost over 30 years? Better monthly payment?-Desoer replied, "It's up to the customer to determine." If any of you try this, let me know how it goes.
She also spoke at length about the second wave of foreclosures coming as moratoriums are lifted and unemployment continues. The bank is involved in several modification programs, but only one of them involves lowering the principal on a mortgage-a program involving pay option loans which was part of a settlement with several state Attorneys General. When I asked why Bank of America wasn't expanding those efforts to lower principal, Desoer told me that she'd first like to see how the other programs work out. "You have to remember that there's an investor, there's a servicer and there's a borrower in the mix, and they each have an interest. We think payment affordability is the key."
She also expects to have the bulk of modifications and foreclosures worked through within a year, though not all. "Unemployment continues to be a lagging indicator."
Finally, I asked her about morale among remaining Countrywide employees. "We're asking them to change a lot, we have asked them to change a lot," she told me, "and I've gotta say morale is very high and they're on board with the brand promise and looking forward to the future."
It may be easier for some to look forward when there are no more reminders--literally, no more signs-of the past.
Here is my interview with Barbara Desoer.
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