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Wednesday, March 11, 2009

Bank of America stops 'no money down' loans to doctors

Even after Bank of America Corp. had cut its dividend, written off billions and accepted billions more in government help, the company had been advertising "No Down Payment Required" home mortgage loans of "up to $1,000,000", at favorable rates, for physicians. See a February ad for the program at marketer eMatchPhysicians here.

Reader Henry Strozeski of Moorestown got a solicitation for the program, which he sent us, adding, "I thought that zero-down loans were a major rason for the current financial debacle, and BofA was a major player."

But it turns out BofA is now stopping the "Doctor Loan Program." We called a couple of BofA lenders around the country. One said the bank stopped making the loans at sub-6% rates as of Friday and was boosting rates above 7% on loans it was still willing to close; another said borrowers who'd already put mortgage money in escrow would be accepted through March, after which the bank will substitute FHA loans with as little as 3.5% down, and loan limits that vary from town to town.

A West Coast mortgage-referral blog -- http://physicianlending.blogspot.com , run by former BofA lender Chris Grubb -- also says the program has been suspended, "effective March 20." Investors (including Fannie Mae) won't buy large, no-money-down loans, he noted. Formerly BofA was willing to make them anyway, and hold them on the books, as a way to develop "long-term relationships" with physician-customers. But not now.

BofA spokeswoman Jumana Bauwens was polite, but said she had no information on the program, when we called Tuesday and Wednesday.
Posted by Joseph N. DiStefano @ 11:25 AM  Permalink | 1 comment
Comments   
  • 0 like this / 0 don't   •   Posted 5:11 PM, 03/11/2009
    The BofA Loan was really 5% down anyways. I got in touch with physicianlending.com and they hooked me up with a real zero down loan. BF who is a banker said I got a really great deal. They also set me up with a realtor who was great. I didn't need a mover because my uncle has his own moving company and did it for free for me.
    — drpata


1 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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