Mortgage Lender Wants Bigger Market Share

Bank of America wants to substantially grow its home mortgage business, and one of the nation’s biggest banks is willing to institute “disruptive strategies” to make it happen if necessary.

The company tipped its hand last week during an earnings conference call with its CFO, Alvaro de Molina.

“When we’ve got a weak strategic position and we have a spectacular franchise opportunity, that’s the ideal state in which to deploy a disruptive strategy,” de Molina told analysts.

These brief comments created significant buzz as industry watchers pondered whether the company, in an effort to gain a stronger foothold into the mortgage lending market, would emulate “disruptive” moves it has made recently.

Specifically, its decision to offer free online banking a few years ago, or this month’s announcement to offer free online equity trades to customers with at least $25,000.

It was an analyst’s question about free trades that prompted de Molina’s comments about mortgages. Analysts speculated BofA could cut mortgage pricing or lower fees, perhaps based on the borrower’s overall relationship with the bank, according to a front-page report in Wednesday’s American Banker.

The bank last year introduced a program that cut up to $2,000 in closing costs for bank customers.

Then, this past summer, Bank of America tested a $250 rebate program to any of its customers who found a better deal on home equity loan rates elsewhere.