Everything Finance

I was recently mentioned in one of the articles in the May, 2008 edition of SmartMoney. About 2 months back I received an email from the author of the article Anne Kadet, asking to talk to me over the phone about my experience with Bank of America during my hunt for a mortgage.
She as writing about a practice that was now being used by banks called "Price Profiling". Price profiling is a very common practice in the travel industry, but Banks ??

Here is an excerpt of the article.

TUSHAR MATHUR HAD every reason to expect Bank of America's best deal on a mortgage. After all, the 31-year-old software developer kept a checking account and a credit card with the giant consumer bank. He had a ridiculously high credit score — 785 — and was willing to make a 20% down payment on a brand-new four-bedroom colonial in the Atlanta suburbs.

But a funny thing happened on the way to closing the deal on his first home. After reviewing his application, he says, a Bank of America representative offered him a rate of 6.5%, nowhere near as good as the 5.8% to 6.2% rates he had been quoted from other lenders. And the difference wasn't lunch money: Had he gone with Bank of America (BAC), his mortgage payments, over the life of the loan, would have cost an extra $21,000 more than the deal he ultimately accepted. "They were higher than anybody, and I don't know why," he says of his branch's offer.

You can read the entire article here.
Banks Are Latest Industry to Try Optimized Pricing By Anne Kadet


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