Bank of America Expands Government Lending Push

November 28, 2007 No Comments »

Bank of America announced today that it will launch a second government loan processing fulfillment center in Dallas to accompany its existing operations in Jacksonville, Florida.

The loan center will provide jobs to about 150 employees who were formerly working in the bank’s wholesale fulfillment operation, which is coming to a close at year-end.

“We will leverage the knowledge and skill of our Dallas-based wholesale associates to help the bank manage the strong growth in demand for our FHA and VA loan products,” said Bob Griffith, Bank of America Mortgage Fulfillment executive.

“Texas is our strongest market for government loan programs, and we are thrilled to have the opportunity to grow our business there.”

Bank of America expects its production volume for FHA and VA loans to rise to nearly $2 billion in 2007, more than double the volume it achieved in 2006.

Most banks and mortgage lenders have turned their attention towards government-backed loans as investor demand for jumbo loans and other seemingly high-risk loans continues to cool.

“The dislocation in the subprime market has sparked renewed enthusiasm for FHA & VA loan products across the nation,” said Allen Jones, Bank of America’s Government Lending executive.

“Government loan programs provide many borrowers with benefits over other programs since the loans are insured by FHA or guaranteed by the VA.”

Bank of America said applications for government loan programs have risen to about 18 percent of total volume in the retail sales channel, up from the low single digits a year ago.

“More than 80 percent of government loans are provided to first-time homebuyers,” Jones said. “With recent successful efforts to simplify the government loan process, we expect continued growth as more home buyers recognize the value and security of FHA & VA loans.”

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