A recent report out of Bloomberg says that BofA is struggling to keep up with the deluge of mortgage refinancing applications that have followed revisions to the Home Affordable Refinance Program (HARP), so much so that they are asking customers to wait for 60 to 90 days before starting their application.
According to the story, not only have Wells Fargo and JPMorgan Chase reported no such delays with HARP 2.0 refinancings, but Bank of America’s stalling may drive borrowers to other lenders or discourage them from seeking refinancing with historically-low rates.
Paul Miller, an analyst at FBR Capital Markets Corp., said the performance of HARP 2.0 has exceeded expectations.
“The HARP 2 program is a much bigger deal than people thought, and Bank of America is dysfunctional to begin with,” Miller said in an interview with Bloomberg. “This is a result of getting out of the business at the exact time they should be getting into the business.”
Originally announced in October, HARP 2.0 included several alterations to the original program’s operations, including: the removal of the program’s 125 percent LTV ratio ceiling, the elimination of risk-based fees for refinancings of shorter-term mortgages and the waiving of appraisals when automated valuation models existed.
Once the nation’s largest mortgage lender, Bank of America’s problems extend beyond its inability to meet refinancing needs, Bloomberg reported. In addition, in January, the company suspended refinancings that allowed for cash extractions from properties, and late last year, the bank flirted with disaster by considering a monthly fee for debit-card users.
Despite the bank’s problems, though, a spokesman was positive in comments quoted by Bloomberg.
“We’ve had strong demand, especially from the implementation of HARP 2, and we’re working hard to satisfy that demand as capably as we can,” said Terry Francisco, a spokesman for the bank.