Last week, Financial Times reported that Bank of America and Countrywide were in talks of merging the

entities to create the biggest mortgage lending group in the US, by far. This comes a few weeks after Bank of America was named the largest bank in the world after it purchased Barclay’s Bank.

How does something like this affect your mortgage? Before, during and after you obtain your

financing.

Before: When you are shopping for your mortgage lender you compare interest

rate and closing costs and will typically go with the lowest quoted lenders. I am a big advocate of service, but nobody puts much credence on that until after

the fact…usually when it is too late. If you choose a bank that is in talks of merger or acquisition, your loan could be affected by service of the staff. If they

are aware there will be big changes, they might be looking for new jobs, falling down on the job or leave before your loan is closed. The biggest problem

would be if your salesperson leaves mid stream; you will lose your advocate within the company. If the back office staff leaves, your loan will just get passed

onto another processor or underwriter.

During: If your loan is being processed while a bank goes into merger or

acquisition it could be affected by poor service or loss of staff. More importantly, it could be affected by elimination of the loan program you are applying for.

In other words, if you have submitted a loan at a high loan to value, lower credit level, non-verified income or some other special product, the lender might

have to alter the loan products available as part of their negation with the other lender. If your loan product is eliminated prior to you closing (even after

your received a commitment letter) the bank can reject your loan….even the day before you are to close.
After: If you close your loan and the bank is purchased or merged by another lender,

your loan terms will need change. You will simply have to mail your checks somewhere else.

Tip: If your loan servicer or lender changes you will receive notice in the mail. The letter will state the new address and loan number (if applicable) of the new lender. There is a 60 day grace period for making late payments to the new lender. If you are late 1 or 2 payments, the lender would considerate a transaction issue and will not report late to the credit bureaus. However, do not do this intentionally but fight for if it happens by accident.