With the financial reform changes beginning to take affect, it's no surprise to hear that Bank of America is changing its grace period policy. After all, there will be a huge loss of revenue from profit centers such as overdraft fees. Beginning February 14th, unless you do your personal banking with B of A, the grace period for paying your mortgage serviced by B of A will shrink from 15 days to 9 days. If you have a B of A mortgage AND you do your personal banking with them, the grace period will remain at 15 days; BUT, a payment after the 9 day period will incur a $6 fee (Click the title above for related article).
There's certainly room to question this from an ethical point of view. Bank of America made an agreement to allow a 15 day grace period - is it right, or even legal, for them to change this for existing borrowers? My hunch is that this transition will occur with little resistance.
Something else to consider is whether other institutions will follow suit. I would guess the number of borrowers who wait as long as they can before paying is substantial, which means potentially huge revenues from late fees are at stake. It's going to be real difficult for the other guys to pass up this opportunity.
Some argue this is no big deal. We should all be making our payments "on-time" regardless. Either way, you may want to keep an eye on the flood of correspondence coming from your mortgage servicer to be sure you're aware of a similar change if it comes.
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