The American banking industry is back and more dangerous than ever before. According to the FDIC, U.S. banks posted a record $40.3 billion profit in the first three months of the year. This staggering profit tops the previous first-quarter profit record that was set more than six years ago, before the financial crisis and big-bank caused Bush Great Recession. So, now that the big banks have fully recovered from the financial crisis that they themselves caused, and are raking in massive profits yet again, you would think that they’d be extra careful not to cause another financial meltdown, right? Wrong. It’s appears that big bank Bank of America is up to the same old dirty tricks that helped contribute to America’s financial meltdown in the first place. According to the American Banker magazine, Bank of America is using a misleading sales pitch and a flood of fine print to sell you and me on mortgage refinancing plans. The American Banker reported Monday that a mailer in New Jersey from Bank of America, “sounds eerily like a sales pitch from the bubble days of 2005.” The mailer talks about annual savings of more than $4,000 if borrowers refinance their mortgages, but according to National Consumer Law Center attorney Andrew Pizor, the refinancing offer would actually add more than $37,000 to the cost of a borrower’s loan. Basically, the mailer focuses on lowering monthly mortgage payments, while neglecting to mention that the borrower would end up paying a higher overall interest rate, and would be adding 10 more years to the overall length of their loan. Pizor told the American Banker that, “I think the pitch is kind of deceptive because it boldly mentions ‘save’ and ‘savings,’ repeatedly, and of course it refers only to the higher interest rate and overall loan amount in the footnotes.”
Posted on: Thu, 13 Jun 2013 13:37:36 +0000
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