In the last post, I told you all about the problems that my real estate partner, Michelle, and I have had with the Big Banks and how we want to discourage any of our clients from every giving them their business.
Now, I want to tell you some of the true horror stories that we’ve seen.
Horror Story #1: I had a client who was buying a house in downtown Phoenix back in 2011. Let’s just say that her bank had the initials “W.F.” Really, they should have had a T between the W and the F. We were five days away from closing and the bank, which had all of the information for months (this was a short sale) suddenly decided that they would not lend on this property because the HOA dues were too high. Luckily, I sent my client over to Jeannie Bolger at Nova Home Loans, who got it her underwritten, cleared and closed in four days. It was like watching a ninja clean up a the mess after a drunk, washed up welterweight started a fight with a bunch of angry cowboys.
Horror Story #2: I had a client who had been contacting her bank for three years trying to re-negotiate her loan in order to avoid a short sale. Let’s call the bank “Bank of Absurdity”. They ignored her pleas, so she contacted me to short sell. Once we listed and had a buyer (after about a month), she contacted the Bank of Absurdity to tell them the good news. They said…..wait for it…… that she would have to go through the process of attempting a renegotiation before they would allow her to short sell. Seeing no other route, she submitted the child-sized stack of paperwork only to be given such horrendous terms on a renegotiation that she had no other choice but to short sell. I’m not kidding. Her monthly payments would have been more than they were before. They pulled other such pranks for the next six months until we finally closed. But, I can tell you that they would have done much better to just renegotiate in the beginning.
Horror Story #3: Just this month, our clients struggled with the banks they chose. One was “WF”, again. The other we will call “US Borg.” In the first case, they never issued the Loan Status Reports that they are required to issue so that our clients can meet their contractual obligation to report their loan status to the seller. Not once did they call our team to update us on the progress of the loan. Only when my business partner (and a woman with the patience of an angel wielding a battle ax) called them many times did they send over what they were supposed to have produced at the beginning of any real estate transaction. The loan officer with US Borg delayed closing by at least a week because he was clearly over-worked and waited until the last minute to do everything. His boss was at a conference when we escalated that situation. The boss, by the way, never returned our phone calls. In both cases, closing was delayed. When you delay closing, much of the paperwork must be updated and the closing costs re-calculated and the sellers tend to get a little hot under the collar because, you know, their entire life has been put on hold because some Big Bank can’t be bothered to spend a little more money on customer service and a little less on their corps of Washington lobbyists.
Do I sound frustrated? Pardon me. I need a moment to re-compose myself.
In the end, interest rates and closing costs mean a lot more than some inconvenience that you or your realtor suffers during the transaction. After all, it is our job to take those frustrations on your behalf.
But I can’t escape the thought that it simply does not need to be this way. Our clients and the clients on the other side of the transaction should not have to be inconvenienced in this way. More important than a little transactional frustration, our clients lose time, money and market value because of the sloppiness of the Big Banks.
Oh, and in case you want to know, I have been in transactions with mortgage brokers that were difficult. But in every one of those cases it was because the other side’s lender was not on top of it or because our clients did not disclose all of their finances or lines of credit. Even in those cases, our mortgage brokers pulled them across the finish line.
So, that is why we always recommend mortgage brokers. There are five of them in our list of favorites, which we share with our clients. We encourage you to call them up and just see if there is a fit. They are all very qualified and very driven. Call me at 602-456-9388.
And, if you don’t like any of our suggestions, please shop around. But, please, please never use the Big Banks.