Bank Watch

BofA steps up efforts to offer mortgages to existing customers

Bank of America’s head of consumer lending, who is based in Charlotte, says the bank has room to land additional business from its existing clients – which has been a key focus for CEO Brian Moynihan.
Bank of America’s head of consumer lending, who is based in Charlotte, says the bank has room to land additional business from its existing clients – which has been a key focus for CEO Brian Moynihan. Bloomberg

Don’t have a mortgage with Bank of America? If you’re already an account holder, don’t be surprised if the bank offers you one.

The Charlotte-based bank sees room to put more mortgages in the hands of people who are already its customers, Steve Boland, head of consumer lending for the Charlotte-based bank, told me Tuesday. It’s part of the bank’s ongoing strategy to get additional business from existing clients – a key focus for CEO Brian Moynihan.

“We still have a number of clients ... that don’t have their mortgage with us, and they fit in our risk appetite,” said Boland, who is based in Charlotte.

Boland said the bank is taking care to assess borrowers’ ability to repay. Like other mortgage lenders, the bank must adhere to federal rules, created in response to the housing crisis, that require lenders to ensure borrowers can repay.

“One of the things our CEO talks about all the time is responsible growth,” Boland said. “We want to make sure that ... we’re setting clients up for success.”

Bank of America’s pursuit of more business from existing customers comes at a time when revenue growth remains challenging for banks, whose net interest margins have been squeezed by low interest rates. Last year, Bank of America posted a 2 percent decline in overall revenue.

Putting more products and services in the hands of existing clients is nothing new for banks. Wells Fargo is admired within the industry for its prowess in that area. Last month, the San Francisco-based company reported its retail bank customers had an average of 6.1 Wells Fargo products per household in the fourth quarter of 2015.

Bank of America does not disclose such figures.

Wells Fargo has faced criticism for its sales tactics. Last year, it was sued by the city of Los Angeles over claims the bank’s high-pressure sales culture led to workers committing fraud to increase the company’s profits and keep their jobs. Wells Fargo has disagreed with the accusations, and its CEO has told the Observer the bank has “zero interest” in giving customers products or services that they don’t want or that don’t help them.

Asked about Bank of America’s approach to cross-selling, spokesman Terry Francisco said: “We want to be a trusted partner for our customers and clients in the moments when they’re making their biggest financial decisions.”

One move Bank of America has been making is putting more mortgage lenders in its branches, which it calls financial centers.

“If I think you go back maybe (to) 2011, I don’t think I had any loan officers in financial centers,” Boland said. “Today, 3,000 of my financial centers are covered by loan officers.”

Boland, 47, entered the banking industry in 1990, when he enrolled out of college in a management-training program at Bank of America predecessor North Carolina National Bank and began running a branch in Miami.

He later went on to work for subprime-mortgage lender Countrywide, serving as president of its LandSafe appraisal business.

In 2014, the bank reached a massive $16.65 billion settlement with the federal government and admitted it, Countrywide Financial and Merrill Lynch took part in faulty mortgage-backed securities practices. The settlement cites claims that, from 2004 to 2011, LandSafe and some other Bank of America subsidiaries originated residential mortgage loans using inflated appraisals.

Boland, who said he headed LandSafe from about 2001 to 2005, rejoined Bank of America through its 2008 acquisition of Countrywide. On Tuesday, he declined to discuss the matter in detail.

“The goal of the settlement was to put any legacy issues that we had to rest,” he said, “and our go-forward strategy is where we’ve had opportunities to improve processes or ensure that our operations are operating as we expect to, that we’ve done (that).”

In January, Boland was relocated from the bank’s One Bryant Park tower in Manhattan to Charlotte, where he continues reporting to Dean Athanasia, co-head of consumer banking.

Boland, one of Bank of America’s highest-ranking African-American executives, praised the bank’s diversity efforts.

“We actually have black executives running large parts of our business all around the world,” he said. “I think that Bank of America has a long tradition of really trying to get the most talented folks and having a very diverse leadership team.”

Elsewhere, the banking industry could be doing better, Boland said.

“If you think about our industry more broadly, the reality is there’s still a lot of opportunity for diversity in financial services,” he said.

Deon Roberts: 704-358-5248, @DeonERoberts