SAN FRANCISCO (CBS 5) – A policy change by the nation’s largest bank has some mortgage customers crying foul.

Starting February 14th, Bank of America will reduce the grace period for mortgage customers who don’t bank with them.

Joe Ridout with Consumer Action believes it’s just another way for Bank of America to make up for $2.3 billion in overdraft fees they used to make prior to financial reform.

“They’re reducing the grace period in which you can pay your mortgage fee-free from 15 days to 9 days if you’re paying from a different financial institution,” Ridout said. Consumers that pay the mortgages through a Bank of America account will keep their 15-day grace period. Any payments made after the grace period will include a $6 service fee.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments (20)
  1. MJo says:

    What’s wrong with this? Why don’t people simply pay their bills on time, when they are due, not when they are at the end of the grace period?

    I know, keep your hands on your money as long as possible. But when the banks are not paying any real interest on deposits, it’s simply better to pay on time on the due date and not have to worry about late fees.

    1. Lauren Winn says:

      You are correct but there are other ways to make use of your money than checking accounts. Don’t give up and let banks continue to get prudent use of your money for free! If you have a loan that calculates daily interest at say 4%, every day your money sits in there it avoids interest at 4%. YOU are now getting prudent use of your money. Same thing transpires with escrow accounts. Your money sits in an escrow account and who is getting prudent use of your money? THE BANK.

      Consumers have to get educated and stop laying down for this. Banks don’t give us anything for free.

    2. Kelly says:

      Or – in this economy, when many are out of work. . . oh, that’s right, until it happens to you, you don’t care.

  2. Eric says:

    People wake up, B of A is well within their rights and are doing nothing wrong, they are looking to reward loyal customers. I don’t even do business with B of A, but think it is fine, you borrowed the money, you agreed to pay it on the due date…not 15 days after, this was courteous, why don’t you extend a courtesy to B of A by banking with them if you want hte courtesy of paying 15 days after the date you agreed. If you don’t like the terms of the loan, don’t borrow the money.

    Americans need to get out of the credit trap and start livign within our means, and quit blaming someone else for taking on more debt than we can handle. They did not move due dates up, if you really need extra time, I bet you could call and move your due date out 6 days to compensate for the difference, if this is still a problem, you can’t afford the loand and need to sell the home to someone who can.

    1. MBJ says:

      I agree with you Eric, but only to the extent that Americans need to get out of the credit trap. However, If when I made the loan, the terms stated that I get a 15 day grace period, I expect a 15 day grace period because those were the terms when I signed for loan.

      By the way, congradulations! You apparently have no problem paying your bills at this time, and you are either rich and/or you and your spouse both have jobs. Not everyone is as fortunate as you are this time. Try seeing past your own advantages, and hope that you never have to be on the other side of the fence… it’s not pretty!

      1. Kelly says:

        Thanks MBJ!

    2. Lauren Winn says:

      Hi Eric

      I respect your take on paying bills on time, however isn’t a loan client a loyal customer? They are making thousands off this customer in interest a year. Why is only a checking account client a loyal customer? I agree with MBJ about the fact that the Bank drew up the 15 day grace period. The bank calls all the shots from beginning to end. Not everybody takes advantage of the 15 days grace period because they can’t pay their bill. There’s such a thing as prudent use of your money. There is certainly nothing wrong with being smart about where your money sits and how long it does. Banks change their policies like we change our socks. Consumers all have to adhere to what they say and quite frankly we all need to quit lying down why they get free prudent use of our money. i.e. escrow accounts, checking accounts etc.

      1. Kelly says:

        Thanks Lauren! THEY do have the upper hand – or rahter the only hand! We have no recourse except dumping their services. However, while unemployed one cannot qualify for a re-fi.

    3. Kyle says:

      @Eric, The bank we took out our home loan through sold our loan to Bank of America. So not everyone borrowed from B of A to begin with. Different banks have different rules with most everything. And selling loans to another bank is common practice in the banking world. So you don’t have as much control over your mortgage as you might think. Thank you for your opinion though.

    4. Kelly says:

      How very uppity of you. The reason I don’t bank with B of A should be obvious. Duh. And I did not seek out B of A to hold my mortgage; they took over my mortgage from another company – absolutely no choice. And get a clue – if your next comment is to go with another company – just not going to happen while I’m unemployed.

      1. Kelly says:

        And speaking to Eric here on the uppidty cmment.

  3. LMB says:

    Principle is all well and good. Congratulations to you if you have no problem at any time paying any and all bills you have.

    Now for the majority of us who have had reduced household incomes (layoffs, etc) and are draining our savings and living hand to mouth and who have had our home value tank … you see where I’m going with this? BofA drags their feet to modify loans even when obvious need is present. BofA chooses to nickel and dime wherever they can. They’re now choosing to change their policy. It’s an obvious attempt to blindside people with a new charge. Hopefully people won’t be so silly as to miss this more than once (but that’s a rather huge assumption) but it’s still going to be thousands if not millions of people that get caught at least once and nothing more than a quick buck scheme by BofA. At this point that’s typical business practice of theirs.

    Sure nothing is legally wrong with it, but it’s poor customer service and it’s an obnoxious change. Why should people be forced to put all their assets into BofA just to ensure their bubble of time for making payments stays what it’s been for years and years?

    Now personally my loan was just assumed by BofA last August. BofA bought the parent company of some other parent company which owned the bank I bought my loan with. I should have no issue with the 9 days vs 15 days, but the bubble is tighter. I already have direct deposit to ensure fast as possible transfers but my employer does make payroll mistakes. Yes it’s my company’s fault if my check is short – but it would turn into my hardship if I’m suddenly a day or two late because my employer couldn’t (or wouldn’t) correct the mistake on time. Then I have to go back and beg and plead to have charges reversed.

    I could go on and on but the net of it is that BofA will take any opportunity it can to make money. They do not deserve our courtesy. They do what’s legal – not nice… they can expect the same from their customers.

  4. KG says:

    This is not the point of “paying bills on time”. The point is that the banks were supposed to help clean up the mess they created when they inflated the home value and made millions. Banks were telling their customers that they were going to help them after they were laid off by lowering their interest rate, and the next correspondence you receive is that your home is in foreclosure. This is exactly what happened to my parents. My dad was only receiving Social Security (less than $800/month) and my mom’s hours were cut and they had to pay over $600/month to cover health insurance. Wells Fargo said they were going to put my parents on a modification and was put on a so called trial period. They were never late paying their house payment in the 20 years they were in the house. After the bank agreed to put them on a modification they damaged their credit by reporting them 3 months delinquent when they were paying their mortgage every month on time. Wells told them that they were late because they were paying the amount that Wells told them to pay instead of the amount of the original mortgage payment. Now their home was put into foreclosure and had to pay over $3,000 which wiped out their savings.
    I ‘m not a mortgage expert but I think that if you enter into a contact with someone it should be honored. The banks are lying to the public and their customers like they are being helpful when they are taking advantage of people.

  5. Ken says:

    BoA is opening themselves up to a lawsuit. The note that people signed with BoA has the specific terms in it regarding late fees. They can’t retroactively change the terms of their contract without the other party agreeing to it.

  6. Sean F says:

    First this is in violation of TILA. Secondly, if BOA buys a loan that has already funded from another lender, there is a disclosure the borrower signed at origination that says that if the loan is transferred or sold that the terms will be the same. Regardless of if someone has the money on the 1st or 9th, or 15th of the month is irrelevent, this policy that BOA is implementing is simply wrong and unethical…

  7. Gareth Ellzey says:

    Bank of America has constantly been user-unfriendly. This is just another instance, IMHO.

  8. Bill says:

    This is a joke. Illegal, illega, illegal. They can not alter the terms of a legally binding agreement that is still in play. The note clearly states the terms of the grace period. Especially if they didn’t orginate the note. Get ready for a class action law suit. AND you want to discriminate against me for NOT banking with you? YOU ARE CROOKS plain and simple.

    1. Kelly says:

      Agree Bill!

  9. Kyle says:

    @Eric, The bank we took out our home loan through sold our loan to Bank of America. So not everyone borrowed from B of A to begin with. Different banks have different rules with most everything. And selling loans to another bank is common practice in the banking world. So you don’t have as much control over your mortgage as you might think. Thank you for your opinion though.

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