Tuesday, August 9, 2011

Big Trouble in Big America

Check it out. Yesterday, one of the nation's largest banks (and mortgage holders), Bank of America, saw it's stock drop 20%. This as a result of a lawsuit filed by AIG Insurance Company, the very day that S&P downgraded the US Debt and Fannie and Freddie. To read the full article, go HERE.




In my small world, deposit holders are flocking to BoA to withdraw their funds, and they're heading over to smaller, locally owned banks such as Reliant, Franklin Synergy, First Bank, Renasant, Tennessee Bank and Trust, and Avenue Bank. Other mega banks such as SunTrust are holding their own without any problems. Their conservative philosophy has proved to protect deposit holders and mortgage borrowers.

In this blog, I would never provide any financial advice (since I am not a financial advisor), but here's what I can say. BoA is the most problematic bank I've ever worked with in my real estate career, whether they were providing a mortgage for my buyer, or whether they were providing a mortgage for the buyer of one of my listings. They have never closed any of my transactions on time, appraisals have come back significantly lower than contract prices (and comparable homes in the area), and they seem to disappear whenever there are problems.

Things in the mortgage area are so difficult that my sellers are now stating that they "will NOT accept a financing contingency on their house from a buyer if the buyer is using Bank of America for their loan." A sad commentary on what was one of the strongest business entities in the U.S.

In the short sale world, BoA representatives are difficult to reach by phone and/or email, and their customer service leaves very much to be desired. A few months ago, there was a rumor that BoA was hiring out of work contractors, hair stylists, day laborers, etc. to man the phones. And when one person in one department was dealing with a problem, another person was stating that the problem could not be resolved.

Very reminiscent of Dell Computers several years ago, Michael Dell came back to Dell as the CEO and has apparently improved operations and customer service. Can this possibly happen to BoA? I'm not sure. Maybe BoA has gotten too large and so fat that it cannot be moved. Perhaps BoA is now more like the Titanic, and cannot be turned around. What should happen now?

People in real estate have varied opinions of the banking giant. Some believe that BoA is the strongest mortgage lender around; others disagree. If nothing about BoA's problems is significant, one thing is for sure: There are a lot of scared people out there.

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For a savvy real estate agent to help you with all of your real estate needs, contact Jack Jernigan at 615-373-2044 or through email at jack@jackjernigan.com.

1 comment:

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