BofA's "No Fee" loan a hit with consumers

Is Bank of America's No Fee Mortgage PLUS loan all it's cracked up to be?

Since it was rolled out nationwide in May, there's been some debate over whether the loan -- which promises to eliminate junk fees while taking care of third-party charges like title insurance, mortgage insurance, appraisal costs, and a credit report -- is more than a marketing ploy.

Skeptics say BofA must be recovering those costs in its rates and points, so what's the big deal?

"The Mortgage Professor," Jack Guttentag, published his take on the loan in July. Working within the limitations of making comparisons online, Guttentag found BofA's loan was more costly than another lender's in 6 of 11 scenarios he tested.

The No Fee Mortgage PLUS loan was one of the bright spots in BofA's third quarter earnings release today. The bank claimed a 27 percent increase in first mortgage originations, with the No Fee loan accounting for one in five of those loans.

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