Bank of America's mortgage chief, Art Ringwald, got an early Christmas present last week. The bank promoted Mr. Ringwald into a select club of 24 group executive vice presidents to reward his efforts in building up the bank's mortgage business.
Mr. Ringwald, who had been executive vice president, said he received the news at a Christmas lunch for the bank's past and present board members.
"People started congratulating me," Mr. Ringwald said. "At first I didn't know why. Then my boss showed up and quickly told me. I was really quite surprised and very pleased."
Mr. Ringwald will continue to report to James Jones, another group executive vice president. The primary change in his job, Mr. Ringwald said, is that he will now perform more corporate duties, such as representing the mortgage division at the bank's board meetings.
The move comes as Mr. Jones, who has overseen the mortgage and credit card businesses at Bank of America, gained new oversight responsibilities for the housing finance, consumer lending and insurance companies at the bank.
In the wake of his promotion, Mr. Ringwald recounted that in his two years at the bank, Bank of America's mortgage division has undergone a sea change.
When he joined, the bank was largely a California-based, regional portfolio lender. Now, he said, the bank has a much more diverse profile.
A significant portion of the bank's mortgage business comes from secondary-market sources, Mr. Ringwald said. The bank has built a relocation and affinity lending business in Minnesota. It has bought Arbor, United, and Margaretten's servicing center in Richmond, Va., and the bank's servicing and loan portfolio is diversified outside California.
"One thing you can walk away with from this (promotion) is that the bank likes the way business is going," Mr. Ringwald said.
Like other mortgage executives, Mr. Ringwald said he is closely watching consolidation in the mortgage industry. He predicted that in 1996 the top 20 originators would get bigger, following the trend already apparent in the servicing side of the business.
He said Bank of America was evaluating how best to maximize the economies of scale on the servicing side of the business. The bank, which now has two servicing centers, is looking at whether new technologies would make it more advantageous to have a few servicing centers, or many.
Mr. Ringwald said the Bank of America has not seen higher delinquencies on its 1994 and 1995 loans, even though loan-to-value ratios have risen in line with national trends.
On credit scoring, Mr. Ringwald said the Bank of America was developing its own mortgage scoring model. He said he expected the mortgage industry's use of credit scoring to evolve. Initially, he said, loans with favorable credit scores would likely have reduced documentation requirements. As scoring becomes more sophisticated, he said, some loans may be instantaneously approved, possibly at lower rates than those judged to have a higher delinquency risk.
Finally, did Mr. Ringwald's latest promotion come with a raise?
"Hundreds of millions of dollars - it was unbelievable!" he said, laughing, before adding: "Obviously, I can't answer that."
