Bank of America recently announced that they will be offering LIBOR based reverse mortgage products to wholesale brokers. According to the announcement, Bank of America still believes that the CMT index is better for you and you customer but they realize the spreads between LIBOR and CMT are volatile and may reverse course in the coming months.
I was surprised to find out that Bank of America hadn’t offered LIBOR products for the past few months. The industry has shifted to LIBOR products and I think over the long run it’s the better option for everyone. Bank of America’s LIBOR offering only allows for LIBOR 125 and 150 margin products and the pricing isn’t very aggressive. Actually, it’s really far off compared to other lenders.
In August, former Countrywide executive Steve Boland was named as Bank of America’s reverse mortgage executive. Boland brings over 11 years of experience with Countrywide and was their managing director and CEO of its reverse mortgage division. At the moment the two companies are operating as separate companies but plan to be fully integrated in mid-2009.
The size of Bank of America’s branch network could be one of their advantages over others in the market. However, they have been slow to integrate reverse mortgages into their branches across the country. A month ago I walked into local branch here in Chicago and asked to speak with someone about reverse mortgages and it was clear they didn’t know much about the product. I was handed off to four different people and after 45 minutes of waiting I just walked out.
I’d expect that to change soon…