'Wells Fargo isn't the only one': Other bank workers describe intense sales tactics

Most Americans were shocked when they learned that thousands of Wells Fargo employees had opened millions of fake accounts.

CNN | September 22, 2016     People who work at other banks weren't surprised at all.

Nearly a dozen current and former employees at large and regional banks such as Bank of America (BAC), Citizens Bank, PNC (PNC), SunTrust (STI), and Fifth Third (FITB) tell CNNMoney that a sales obsession pervades their banks. They say they too are under immense pressure to get customers to open multiple accounts.

They described a focus to push as many different products -- think debit cards or new online accounts -- as they can, an industry practice known as cross-selling.

"Wells Fargo is not the exception (with its) absurd sales culture," said one former manager of two large regional banks.   Read more here.

 

Airbnb Income: How It Can Mess With Your Mortgage ‘Refi’

Homeowners who rent rooms are facing additional scrutiny when applying for loans

The Wall Street Journal | August 29, 2016         Room-rental services such as Airbnb Inc. are blurring the line between residential and commercial property. That is causing problems for some homeowners looking to refinance mortgages. (Read what Airbnb hosts need to know.)

Big banks including Bank of America Corp. and Wells Fargo & Co. are subjecting some refinance customers who rent rooms to additional scrutiny. Some borrowers have been told they were no longer eligible for certain kinds of loans or would have to pay higher interest rates, according to the customers.

“This is kind of novel,” said Jeffrey Naimon, a consumer-finance attorney and partner at law firm BuckleySandler LLP. “I don’t think the market has gotten its arms around it.”

The issue for lenders is how to classify loans in the Airbnb age. Historically, that has been easy: A house usually was either a principal residence or an investment property. Mortgages on the latter are often viewed as riskier because owners had less of a personal connection to the house and rental income isn’t always reliable.

Now, the distinction isn’t so clear-cut. Online-rental services are spreading rapidly; Airbnb’s website had 455,223 active listings in the U.S. as of July, up 80% from a year earlier, according to research firm YipitData. That is posing challenges to lenders and frustrating some customers, illustrating how fast-paced technological change can reverberate in unexpected ways.

The issue comes up when borrowers report income from services such as Airbnb when applying for a new loan, often in hope of improving their credit profile. That, they hope, can lead to a better interest rate on a loan.  Read more here.

 

Bank of America Now Offers 3% Down Mortgages Without Mortgage Insurance

Partners with Freddie Mac, Self-Help Ventures Fund

Housing Wire |  February 22, 2016    Bank of America unveiled a new affordable mortgage program that offers consumers the option of putting as little as 3% down and requires no mortgage insurance. The program does not involve the Federal Housing Administration, whose program has recently undergone a lot of scrutiny from big banks. 

Bank of America announced a partnership on Monday with Self-Help Ventures Fund and Freddie Mac for its new "Affordable Loan Solution" mortgage, a conforming loan that provides low- and moderate-income homebuyers access to a responsible lending product with counseling at affordable entry prices.

To make the program function, the three companies will work together to help ensure the loan is properly originated and backed in case the loan goes delinquent, the companies said Monday.

For starters, Bank of America said the mortgage will be available through all of its mortgage sales channels. Read more here.

New Bank of America Whistle-Blower Emerges: More Customer Abuse Secrets

Last week, I detailed bombshell revelations from Bank of America whistle-blowers, in which former employees of the bank detailed systematic fraud and deceptive practices inside their loan modification department — including bonuses and Target gift cards for staff who racked up foreclosures.  Read more here.

Bank of America whistle-blower’s bombshell: "We Were Told to Lie"

Bank of America’s mortgage servicing unit systematically lied to homeowners, fraudulently denied loan modifications, and paid their staff bonuses for deliberately pushing people into foreclosure: Yes, these allegations were suspected by any homeowner who ever had to deal with the bank to try to get a loan modification – but now they come from six former employees and one contractor, whose sworn statements were added last week to a civil lawsuit filed in federal court in Massachusetts.  Read more here.