Clever Marketing, Hollow Commitment by BofA

No More Countrywide

It only took Bank of America (BofA) less than 10 months to completely extinguish the Countrywide brand. On Monday all of Countrywide’s bank branches as well as their website were converted to that of Bank of America Home Loans.

Of all the mergers and acquisitions in the financial world these days, BofA’s quick transformation of Countrywide showed an urgency to rid themselves of a toxic brand and start fresh:

“Our own market studies saw a shift in consumer sentiment,” said Barbara Desoer, president of the banking giant’s new mortgage brand: Bank of America Home Loans. “A lot of what showed up in research,” she said, “was that as a consumer, ‘I want to deal with a brand where I have trust and confidence.’ “

Clarity Commitment

BofA took additional steps to prove that Countrywide’s reputation as a deceitful lender would not bleed into their new brand. BofA’s desire to incorporate added transparency to the loan-making process has led to the creation of the “Clarity Commitment.”

The Clarity Commitment is “a single, one-page loan summary clearly presents to borrowers their interest rate, terms and other details of the loan in plain language”:

“We met with thousands of customers and created tools that reflect the transparency they want in the home-buying process,” said Barbara Desoer, president, Bank of America Home Loans. “Doing the right thing for our customers is the foundation of our brand promise to always be a responsible lender and help create successful homeowners, and these tools exemplify that promise.”

Where’s the Commitment?

Despite its good intentions, the Clarity Commitment should more accurately be called a “commitment to clarity.” It sounds as if I’m splitting hairs, but besides reiterating information that every borrower should already know, the piece of paper does little else.

“It’s not actually a commitment, but rather a reiteration of some basic loan terms,” said HSH Vice President Keith Gumbinger.

“As well, using the term “commitment” may inadvertently cause some confusion of its own, given that there will be an actual loan commitment at some point.”

Nothing New

Since the concept is nothing new, and the fact that BofA believes in it so strongly, makes you wonder why they didn’t offer it to their customers sooner? Tim Logan of the St. Louis Post-Dispatch sums it all up the best (complete with a healthy dose of sarcasm): “Clarity in home lending. What a concept.”