Some good news for homebuyers. The Wall Street Journal (you need to subscribe) has a story about Bank of America cutting fees on mortgage loans.
Under the program, Bank of America won’t charge borrowers for loan applications, title insurance, appraisals and flood certifications or require them to get private mortgage insurance. Typically, borrowers who don’t put 20% down must get mortgage insurance or take out a “piggyback” loan, which combines a mortgage with a home-equity loan.
Borrowers must still pay some costs, including property insurance, property taxes, recording taxes and other “services voluntarily chosen by the customer,” such as home inspections.
The no-fee mortgage program is the latest effort by Bank of America to use what the bank calls “disruptive strategies” to gain market share in businesses where it has been relatively weak.
I expect competitors will match BofA, perhaps even setting of a fee war. Even though they have come down over the years, fees in the mortgage business have been too high for too long.
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