Today I got a “Welcome Guide” from Bank of America because I was until recently a Countrywide customer. Countrywide, like many institutions that are in trouble, was offering some very high CD rates last year before being acquired by Bank of America, so I put money there – below the FDIC limit, of course – just like I put money at IndyMac and Wachovia shortly before they failed. (For people who like to chase high rates, I recommend Bank Deals.)
Anyway, this nicely designed welcome guide had a page titled “Clarity,” with this text:
We’re working to take the guesswork out of home lending with ideas such as our Clarity Commitment. This simple one-page loan summary clearly highlights key terms of each new loan. We’ve made it easy to read and easy to understand. So when you’re ready to buy or refinance, you can be confident that you’re choosing a loan that’s right for you.
Unfortunately, there’s a footnote that say, in very fine print:
This summary is provided as a convenience, does not serve as a substitute for a borrower’s actual loan documents and is not a commitment to lend. Borrowers should become fully informed by reviewing all of the loan and disclosure documentation provided. Not available on all products and programs.
I understand the value of high-level disclosures and the need for detailed contracts. But as a marketing message, this one seems to shoot itself in the foot.
By James Kwak