Articles in The Wall Street Journal and The New York Times have both highlighted how the Bank of America is pulling back from the mortgage market.  With the real estate market starting to recover, this opens up tremendous opportunities for profit in meeting the needs for home loans.private money lending  An excellent way to gain from the retreat of Bank of American is to move forward with private mortgage lending to the buyers of real estate.

In a New York Times piece by Jessica Silver-Greenberg and Peter Eavis, “In deal, Bank of America Extends Retreat from Mortgages,” it was reported that Bank of America now had about 4 percent of the home mortgage market in the United States, down from about 20 percent in 2009.  About this, Glenn Schorr, an analyst with Normura, noted that, “Bank of America is sending a clear message that the bank only wants to be a mortgage lender to a select, small group of people.”  An article in The Wall Street Journal by Shayndi Raice and Nick Timiraos, “Mortgage Gamble Pays off for Wells,” furthered this point.

Through providing a private mortgage the larger group of people who are not selected by Bank of America, there is the opportunity for profit.  A private mortgage is one provided by an individual or group of investors.   There are two ways to participate in being a private mortgage lender according to Jerry Cohen, President of EquityBuild, a premier private mortgage investment firm:  “There are two methods for getting started in private mortgages: Mortgage Pools and Direct Lending.  Mortgage pools are like the mutual funds of private mortgages. Each investor's money is pooled with the other investors participating in the pool and the money is used for private lending.

Cohen, who was just awarded the prestigious “Moving America Forward” honor for the success of EquityBuild and EquityBuild Finance, its financial arm, furthered that, “Direct lending is typically reserved for seasoned real estate professionals due to the level of expertise that is needed to identify undervalued properties...”

About the Bank of America pullback from home lending, Ira Rehingold, Executive Director of the National Association of Consumer Advocates, stated, “This is part of a broader consolidation of banks and that is something that we should all be very, very concerned about.  Anything that leads to less competition can only be bad for consumers.”

Private mortgages can easily fill that gap, providing more than just competition.  What a private mortgage offers is an entirely new paradigm, both for the lender and borrower.  The transactions can be contoured to serve both parties in a flexible, expeditious manner.  There is no waiting for approval from the loan committee’s meeting later that month.

The American taxpayer spent trillions saving financial institutions like Bank of America.  One suspects this largess was not for Bank of America to restrict its mortgage lending operations.  Private mortgages can deliver to the consumer where Bank of America does not want to go anymore, without the US taxpayer needed to prevent a bankruptcy from occurring.