When Bank of America (NYSE:BAC) gobbled up Massachusetts-based FleetBoston Financial in 2004, it inherited a history of service to the state's low-income borrowers. Now, 10 years after attaining the Northeastern presence it so desired, B of A has decided to quit the SoftSecond Program, now known as ONE Mortgage.

In addition, according to the Homeownership Action Network, the bank is channeling Countrywide by steering borrowers who would qualify for affordable ONE Mortgage loans into pricier Federal Housing Administration mortgages.

Created to right a grievous wrong
The Massachusetts SoftSecond loan program was created in response to racially biased lending practices documented in a 1989 report by the Federal Reserve Bank of Boston. Community activists formed the Massachusetts Affordable Housing Alliance in order to address ways to remedy the situation, in partnerships with the Mayor's office and a slew of banks serving the greater Boston area.

In 1991, the newly formed SoftSecond Program began originating loans – the same year that Fleet Bank purchased Bank of New England, thus entering the Massachusetts market. Fleet bought other area banks as well, and, after each sale, agreed to continue with and expand the lending program, at the urging of community housing activists.

When Bank of America bought Fleet, management was resistant to signing on, but eventually did so. The bank even committed itself to a 10-year lending initiative, in which it pledged to make 3,000 loans.

But that dedication began to falter last year. Whereas the bank originated well over 1,000 mortgages in 2009, fewer were made each year, beginning in 2010, the same year that the program was renamed ONE Mortgage. By 2013, only 68 loans were originated within the program, even though the bank has acknowledged that 40% of its lending over the past months was to persons who were eligible for the SoftSecond/One Mortgage Program. Instead, these loan applicants were offered more costly mortgages.

The only one to leave
Bank of America is the only one of the seven banks administering the program to indicate that it will no longer participate. Because of its great size, however, its absence will be sorely missed. Over the past 22 years, B of A and its acquisitions made up over 40% of SoftSecond/ONE Mortgage lending, with B of A itself making nearly 20% of the program's total number of loans just since its purchase of FleetBoston.

While the bank did not seem to give any particular reason for opting out, it insisted that it would still be able to serve lower-income borrowers outside of the community-based program.

Ten years ago, Bank of America noted in its announcement of the merger with Fleet that it planned to continue with both banks' "outstanding history of community investment", particularly mentioning its goal to continue advancing credit to low- and moderate-income markets. Unfortunately for struggling families in Massachusetts, that commitment now appears to be history.