Getting a Mortgage to Buy a Home: Bank of America & the Dance of Death


Take our advice and avoid Bank of America like the plague.

BofA is one of the largest mortgage lenders in the United States today and, until not too long ago, one of the most prestigious as well.  It used to be that a pre-approval from BofA meant a lot because of their relatively high credit standards (admittedly, the bar set by the mortgage industry was extremely low).  I’ve had many clients use BofA over the years and seldom had any problems.  That all changed in August as we were preparing to close a client’s purchase of a FSBO house in Seattle.

The first foreshadowing of the problems to come was BofA’s discovery that an FHA rule required postponing the closing date.  Turns out the seller hadn’t held title long enough (90 days) due to a transfer out of her LLC into her personal name.  Ok, that’s not BofA’s fault or our client’s fault so no big deal.  BofA assured us that they had everything they’d need and they’d close this puppy lickety-split so all we had to do is wait out the rest of the 90 days. 

So, we extended the closing date, jumped through a hoop or two, and waited for the FHA-required time period to pass.  Unfortunately, lickety-split turned into a whole month of foot dragging and excuses for why the deal wasn’t closing.  Repeatedly we were told that “we’re in underwriting” but now they need this, that or the other thing.  Or they’re waiting for a response from somebody about something.  Or something got lost or misplaced.  Or forgotten.  Or they need something they didn’t anticipate.  Then they need a new appraisal.  It was non-stop.  I was told “I’ve got a call into so and so but haven’t heard back” or “I sent so and so an email and am waiting for a reply” so many times it was ridiculous.  Apparently, returning internal calls or emails is optional at BofA.  It got so bad, the apologies so numerous, and the incompetence so great that we were kicking ourselves for not going to a new lender.  And BofA wasn’t denying it.  They ended up comping our client several nights in a hotel and a birthday dinner at one of the most expensive restaurants in town.

Now I’ll be the first to concede that hiccups and delays before closing are common and practically par for the course these days.  But they seldom merit starting over with a new lender only days before closing.  In this case everyone at BofA assured us that the file was fine and they just needed a little more time.  So we hung tight.  In hind sight it might have been worth the effort to look elsewhere.

Our client really wanted the home and was understandably concerned that the seller would back out.  The concern was valid because the seller could have reasonably decided to walk away.  Fortunately, the contract we drafted protected our client’s earnest money so the seller had a big disincentive to bailing out.  Our client’s desire for the home also made sense because it’s a great house and he was getting a great price: two separate appraisers both appraised it for more than the agreed upon sales price.  That’s pretty impressive in this day and age when appraisals come in low much more often than high. 

Fortunately, we had a very understanding seller and an open line of communication gave her some idea of why we were being delayed.  Ultimately, BofA got their act together and the deal closed but the process taught us a real lesson about how far BofA has fallen.

It’s clear that BofA didn’t use the billions of dollars in bailout money it received to hire enough staff or to train and motivate their staff to do quality work.  

Well, we’ve learned our lesson and we’ll politely decline the next time somebody asks us to do the Dance of Death with Bank of America.

Posted by Marc Holmes

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Residential Real Estate Lawyer Marc HolmesMarc Holmes is an attorney in Seattle with a practice focused on residential real estate. In 2009 he merged his life-long passion for real estate with his law practice to create WaLaw Realty. WaLaw is a new and unique model that combines legal representation with the services of a real estate agent while charging much less than a traditional agent. Marc blogs when he has a chance.

One Response to “Getting a Mortgage to Buy a Home: Bank of America & the Dance of Death”

  1. john4944455 says:

    keep up the great work on the site. I love it. Could maybe use some more updates more often, but i am sure that you have got other things things to do like we all have to do unfortunately. =) 49444

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