It's Official: Bank of America Is the Lousiest Mortgage Lender
Despite low interest rates, the recent earnings reports of some of the nation's biggest banks showed that there is money to be made from the mortgage trade -- and plenty. Wells Fargo (NYS: WFC) , the mother of all mortgage originators, experienced the biggest increase year over year, while JPMorgan Chase (NYS: JPM) did pretty well, too. As for Bank of America (NYS: BAC) , well, not so much.
Of course, B of A is at a disadvantage -- namely, the troubled legacy mortgages it acquired when it purchased Countrywide. But another piece of the puzzle has now come to the fore. It seems that Bank of America is just plain terrible at the mortgage business.
Study shows B of A just can't get it right
The J.D. Power study took a look at the 14 largest mortgage originators, rating them according to the responses on nearly 3,500 mortgage customer surveys. Based on a satisfaction scale that topped off at 1,000 points, BB&T (NYS: BBT) did the best of the large banks, with a score of 817. The lowest score, 696, belonged to Bank of America, which finished dead last.
What did the customers complain about?
Overall satisfaction was below average for the bank, reflecting a general lack of communication between lender and customer. Respondents reported low levels of satisfaction in four areas: The loan application and approval process, the level of expertise and courtesy of the loan officer, transparency and convenience of the closing process, and how well the bank resolved issues and answered questions regarding the entire process.
Wells came through with only average scores, surprising considering that the bank processes the bulk of most mortgages these days. JPMorgan did better, getting a better than average grade for overall satisfaction. In addition to BB&T and JPMorgan, U.S. Bank (NYS: USB) also finished up in the second tier, right below Quicken Loans -- the only lender to attain a perfect score.
The results of this study are disappointing for a couple of reasons. For one, Bank of America has had some pretty good press lately, both on the consumer relations and the mortgage fronts. Consulting firm Celent recently awarded the bank its highest service award for in-branch customer orientation, and B of A is trouncing its fellow signatories to the $25 billion foreclosure fraud settlement by executing its obligations far ahead of schedule.
I would think that being tops in the above two areas would have led to much different results coming from the J.D. Power survey. Then, again, the bank's behavior toward customers after super-storm Sandy shows that in many areas, B of A has much work to do in order to make up with the banking public.
The second reason for my disappointment is this: If Bank of America isn't serious about getting back into the mortgage business, what does it plan to do to turn itself around? For investors' sakes, I hope B of A takes a close look at these results and learns from them.
Will Bank of America ever pull itself together? Despite its misfiring here and there, it keeps trying -- and piquing investors' interest. To learn more about the most-talked-about bank out there, check out our in-depth company report on Bank of America. The report details Bank of America's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.
The article It's Official: Bank of America Is the Lousiest Mortgage Lender originally appeared on Fool.com.Fool contributor Amanda Alix has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo. Motley Fool newsletter services recommend Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.