2012-01-27bizjournals.com

Bank of America has stopped originating cash-out home-refinance loans. The new policy went into effect last week. And the Charlotte, N.C.-based bank has suspended all mortgage refinancing activity that allows homeowners to convert equity in their homes to cash.

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BofA spokesman Terry Francisco confirmed the policy when contacted by the Charlotte Business Journal, a sister publication of The Business Review. However, he says the change is only temporary. He says the bank has seen a "tremendous surge" in refi applications since a new federal policy took effect Jan. 17. That policy allows banks to refinance homes more than 125 percent underwater and still receive a government guarantee on the loan.

Francisco says the increased volume of applications stemming from that issue forced BofA to temporarily suspend cash-out refis so closing times for other loan types didn't suffer.

"We hope to reinstate them as soon as possible," he says.



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