Why Lenders Piss Me Off

Yep, Jay happened to our team last week. 45 day close on a REO, our buyer was putting 40% down on a 570k house that used to be worth 750K. Credit over 800 and huge income (retinal surgery specialist).

Well the lender kept saying “they kept coming in with new conditions”. Ok but you have had 38 days since inspection to get it done. They got the docs (almost all of them, but not quite all) to escrow 45 minutes before end of business one day before closing. Then lender boss said, “we’ll just use our escrow and do split escrow and the seller will have to live with it.” Now the seller is an out of state REO through a third party intermediary, using a local title and escrow company. It became a mess, because of course the out of state seller wasn’t going to allow a different escrow.

After phone calls, emails, jumps up and down the chain of command, numerous calls to our clients, the escrow, the lender, the lender’s boss, the lender’s manager…. AND WE GOT IT DONE (of course). Two days late, but the clients are happy with the new home. Oh and the lender lost an addendum crediting the buyer with a small amount for repair costs. I guess they apologized to the clients. I felt bad for the experienced loan officer who had come over from one company that went broke and now is at this one that can’t get it right and is close to being absorbed. As the client said, “we should have had a different bank do this.” This is why we make the big money, I guess.

Ooohhh, does misery love company. I’m glad I’m finally privy to a story like the above that isn’t about me.

Lets face it, it’s hard to get financing these days. Especially in the world I’m living in (investments). My biggest poo poo is the lack of communication. Problems arise, they suck. But they’re much easier solved when people know about them BEFORE the day escrow is to close.

OK, I feel better.

Jay, glad you closed at any rate.

Well put – when we bought our home we were put in the same situation as your buyers, and although it’s only a day, it’s a huge hassle. Rescheduling the pod or moving van, finding a place to stay one more night, rescheduling friends and rescheduling any work conflicts are all things that add up to a huge pain in the a$#. You’d think that lenders would want repeat business as much as anyone else…guess not

I had a buyer’s loan rep tell me that we should be glad that the loan processor worked so hard on the file to get the loan docs to title. That was 2 days after the scheduled close of escrow and loan docs were just being sent. He could not understand why I was so upset. Like you say, they can’t understand the arrangements buyers and sellers have made which are thrown into turmoil. It finally closed and the lender’s loan rep still thinks they did a stellar job!

It’s been whirlwind around here with these lenders. Just had one which there was had an EM dispute, bottom line put house back on the market, got another offer, need statutory cancellation agreement, nobody at the bank could find, frantically searching for it. Turns out it was buried on the attorney’s desk and got it at the last moment.

Also was suppose to have a closing on Monday but just because it wasn’t DPA, it got pushed out to Thursday. That is ridiculous. There is just no urgency with these people and they just don’t care about anybody.

The way these Mortgage Brokers run their business, they will go the way of the dodo bird. The only lenders left are the banks, so if we are going to subject our clients to crappy service, missed closing dates, why not let them save the origination and other fees for the same amount of aggravation? I have been learning about: Owner financing, credit unions, local banks that hold loans in portfolio and of course Wells Fargo. All have lower fees, more competitive rates and sometimes even gratitude for the business.

Mr./Ms. Mortgage Broker: Why should I put my family’s livelihood and survival in your hands, when I have to sweat your ability to do what you say you can? If I order a #1 at McDonald’s, I get a big mac, fries and a drink in a timely manner even at lunch hour when it is busy. If you can’t even do what McDonald’s can do, ie what you say you will, why should my client trust you with their biggest transaction?

Jay: This kind of stuff has been going on for years. But to think in this current environment that they aren’t bending over backwards for strong borrowers is incredible. Maybe they don’t have to make good business decisions ’cause they know there is a bailout available if they can’t make a go of it. Oops, did I just say that out loud?

Make friends with your hometown banks, people. They are where it’s gonna be at for awhile. Plus, their performance is tightly tied to their street rep, so they have more incentive to do things right.

I have a great guy that I recommend to my buyers – he always comes through and when he tells me the clients are ‘good to go’, I know that they are. However, when I’m on the listing side, it’s always a crap shoot. In this market, I’ve found the banks to be the worst at meeting due dates and messing up the paperwork. They’re very unresponsive, work on THEIR timetable (banker’s hours) not the due dates of the Contract, and don’t seem to care whether the loan gets approved or not.

Now the out-of-state or online lenders … well, BIG red flags all around!

Jay, I believe you hit the nail on the head – does the person care. I used to always dislike dealing with mortgage brokers and continued to feel that way right up until we happened across one who really cared. That was about 4 years ago. We use her every time we can and NEVER have any problems. The marked differences between her service, being able to depend on what she tells us and most every other lender we “wind up with” because we are on the listing side is quite a contrast.

I have a transaction manager that follows up on every detail of the files from beginning to end. One that we had (only for a few months, years ago) would call the lender and “wait” for a return call. I knew something was wrong because she could finish all of her work in about a third of the time that it took my other personal to do the same work. When we discovered that she wasn’t really following up but waiting for them to call her back (when they didn’t), her response was, “they were supposed to call her”. I told her if all of the lenders and title companies did what they were supposed to do – she wouldn’t have a job.

The real difference in the results we desire is simple: caring.

Much appreciated, Matt.

Still not receiving Christmas cards from that guy. Go figure.

Jay – sorry to hear of your bad experience. I think what you said about communicating is important. In this climate even on best of case scenarios – things sometimes will come up. The good loan officers will let all parties know that – hey – something came up and act to correct it in a timely fashion. The bad ones hide from it and ignore the issue until it affects the closing. While its sometimes hard to pick up the phone and tell the agents or the good borrower that such as such is having issues – it’s still a whole lot better to do it with time on your hands then hope and pray the issue goes away. In my experience I’ve found that people appreciate upfront honesty like this and will do what ever needs to be done to help you get that document or that signature or whatever is needed. They’ll see that you as a lender are working for everyone and wanting to get things closed.

SIGH………….