August 11, 1999

Mortgage program sheds down payments, fees

By Leslie Miller

BOSTON -- Bank of America announced Tuesday it will finance an unprecedented $3 billion mortgage program for low- to moderate-income borrowers that promises no down payment, no application fee and no closing costs.

The national program will be overseen by Boston-based Neighborhood Assistance Corp. of America, led by self-described "urban terrorist" Bruce Marks, who has a track record of getting loan commitments from banks after accusing them of discriminatory lending practices.

"As cynical as I am that all bankers are evil, this is the exception to the rule," said Marks.

The agreement will affect 100,000 borrowers nationally, according to Marks.

"There's a big need throughout Texas and the many states we operate for this type of program," said Pam McQuitty, Bank of America's Dallas spokeswoman. "This will enable more people to become homeowners."

Marks and Bank of America say the bank voluntarily decided to make the mortgage commitment because it's good business.

"It's not charity," said Robert Johnston, senior vice president for Bank of America's community development bank. "There's a lot of cash transactions in the inner city. We see a real value in lending in the inner city."

In 1995, before NationsBank was acquired by Bank of America, it decided to lend $500 million in mortgages through Neighborhood Assistance Corp. over five years.

Neighborhood Assistance, which has 20 offices nationwide, originated the loans with low-income, first-time borrowers who were often distrustful of banks. The organization helped navigate the borrower through the confusing mortgage process and, most important, offered post-ownership assistance -- while NationsBank made money, said Johnson.

"We've always felt that Community Reinvestment Act lending was good business for banks," said Robert Garsson, spokesman for the federal Office of the Comptroller of the Currency. "We've encouraged them."

Marks calls the program the biggest ever -- and a tremendous opportunity for working people who might not have the savings who need to buy a home.

"We have a history of having to do whatever it takes to get lenders to the table," Marks said. "Now we have lenders say, 'This works.' "

Bank of America's home mortgage product will be available immediately in Atlanta; Baltimore; Buffalo, N.Y.; Charlotte, N.C.; Jacksonville, Fla.; Los Angeles; Memphis, Tenn.; Washington, D.C.; Dallas-Fort Worth; Houston; Oakland, Calif.; Sacramento, Calif.; San Antonio; and Tampa, Fla.

Within the next 12 months, the program will be available in New York City; Las Vegas; Phoenix; Albuquerque, N.M.; San Diego; and Little Rock, Ark.

This article is reprinted here for non-commercial, educational, fair use purposes only.