Banks are reaping huge profits from new mortgages since the Federal Reserve began its third round of bond purchases in September. In fact, QE3 so far has helped lenders more than the Fed’s intended targets: homebuyers and property owners looking to refinance.
The more depressing thing about these behemoth banks is that they don’t seem to care much about their customers, at least according to Consumerist reader Matt, who said he’s already to put in his vote for next spring’s Worst Company in America tournament.
Here's the latest tale of woe.
Matt’s mother passed away on Oct. 1 and since then, he has been going through the process of notifying credit card companies, utilities and everyone else, the Consumerist reports.
“All of them were fairly cooperative,” except for Bank of America, Matt told the Consumerist. Matt couldn’t locate any of his mother’s mortgage documents, so he had to call Bank of America to see what he should do.
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“The first call ended after the associate we were speaking to told us that the only person they could talk to was the person who was listed on the mortgage: my mother,” Matt said. “Since she was deceased, that’s obviously not possible, so we explained ‘death’ to the person we were speaking to. They said they had to talk to my mother, we decided it was hopeless, and gave up.”
Later, another representative suggested Matt should send the bank a copy of his mother’s death certificate.
“They lost that one. Then they lost the next one. Then they lost the third, hand-delivered, death certificate. They finally managed to get the death certificate to a filing cabinet on the fourth try. They sent a letter acknowledging they had received the death certificate, but still they asked to speak with the person on the mortgage,” Matt said.
Somewhere around the fourth attempt at sending the death certificate, Matt started getting bombarded by Bank of America’s internal debt collectors calling for their missing mortgage payments. He tried to explain that he was dealing with the bank to sort everything out but the caller would only say, “We need to speak to your mother.”
Although Bank of America stopped calling Matt after he placed a Cease & Desist order on the bank, the story doesn’t end here.
Thirty days after his mother had passed away, Matt sent Bank of America a letter to demonstrate that an executor for the estate had been named. The bank later lost three of them.
“When we asked about insurance, we were told they’d never heard of such a thing. We were then told to wait 5 business days for the documents to go into the system. We gave them 7 and called back, but they weren’t in the system. We were then given the name of a manager and told we’d be called later that day. That was November 21, we’re still waiting for that call,” Matt said.
By Matt’s total, that brings the total to six lost documents, one Cease & Desist order and eight weeks that should have been spent mourning his loss rather than resending the same paperwork over and over.
Meanwhile, interest rates on mortgages and refinancing are at record lows, giving borrowers plenty to celebrate. But the bigger winners are the banks making the loans.
The jump in revenue comes from their role as middlemen. Banks make their money from taking the mortgages and bundling them into bonds that they then sell to investors, like pensions and mutual funds. The higher the mortgage rate paid by homeowners and the lower the interest paid on the bonds, the bigger the profit for the bank.
Even though Bank of America’s profit plunged 95 percent in the third quarter, its mortgage business was a bright spot. Mortgage banking revenue climbed 25 percent from a year ago to $2 billion. In a conference call with analysts, Chief Financial Officer Bruce Thompson said he expected the mortgage boom “to continue through the lion's share of 2013.”
Shares of Bank of America Corp (NYSE: BAC) closed down 18 cents, or 1.78 percent, to $9.66 in Tuesday’s session.