Recently, one of the biggest lenders in the country, Bank of America, decided to shut down their wholesale mortgage operations and take that portion of their business in-house. Their intent is to run all of their mortgage originations through their retail channel, giving them more control over the transaction, and in their mind making more money.
Let me speak to each part of that. As far as control, yes, anytime you bring things wholly internal you have more control over your service levels. However, I have personally experienced the level of “service” that Bank of America has on the retail side, and I have to tell you it is pretty laughable.
I have done loans for clients that walked into a retail branch to do an application and were told it could be 2 to 3 weeks before someone would call them back. I have a friend that has a RELATIONSHIP with Bank of America area who is right now in the process of getting a pool loan from there. The person he is dealing with on the retail side has more than once made him want to forget about the thing all together! Look, people are people, but let me tell you, based on my experience, what is going to happen if the service levels stay that way- they will go back and open up the wholesale channel.
This business is not just about quoting someone a rate off of a rate sheet, it is about getting to know their goals and needs, and meeting those. It is not for someone who makes $10 an hour to say “based on OUR guidelines, here is your rate and program Mr. Customer.” It is about a professional who takes the time to ask the right questions so that they can find the right program for the CUSTOMER.
As for the money part- you tell me. Is it really more profitable to internalize things if you can only handle (with good service) a SMALL portion of business, and your service levels get in the way of the LARGER portion that you are missing out on?
Craig Pollard is a mortgage professional and owner of Texas Mortgage Team. He specializes in the Dallas Fort Worth area and is a frequent voice on Texas Home Central’s blog. Craig can be reached at CPollard@Texasmt.com or 972-317-9900
This entry was posted on Thursday, November 15th, 2007 at 3:30 am and is filed under Housing Market, Money Matters, Mortgage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.