E-Z Refinance - Don't you believe it.
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Frustration to the max
By now most everyone has heard the ads on the radio regarding the currently low interest rates and easy refinancing on real estate. After much nagging from my spouse, I reluctantly agreed to look into refinancing our rental property to obtain a lower interest rate and earlier payoff. I made some phone calls and was advised the best place to start was with my local bank. Now this was fine with me because it is a small local bank, not one of the big monster banks, and I have been banking there for years.
I went into the bank and talked to the manager, and all the pretty ladies behind the counter where they all know my name, and probably everything there is to know about my finances. I walked out with a couple bushel baskets full of papers to fill out and return to them. Over the next few days I did complete all this paperwork and hauled it back to the bank. They then explained to me that this bank was too small to give mortgage loans, but their loan officer would "shop it around" and get me the best possible deal. Oh, and there would be a $350 charge for an appraisal on the property. By this time I just wanted to get it over with so told them to proceed.
Today I got a phone call from an Underwriter who had some questions I must clear up before they could approve the loan. I reluctantly said "go ahead and ask your questions."
Underwriter - "The physical address of your primary residence and your mailing address don't match?"
Me - "That is because I rent a mail box at a private mail facility. I had to do this because of mail theft from my box up on the highway."
Underwriter - "Why do you have a Washington State drivers license when you claim to live in Arizona?"
Me - "I have not lived in Washington State for over 20 years and I provided you my Arizona drivers license number when I filled out all the required paperwork."
Underwriter - "We find no record of you making payments on your primary residence?"
Me - "That is because it is paid for and I don't make payments on my primary residence."
Underwriter - "You are also listed as the owner of another home near what you claim to be your primary residence, yet we find no record of payments on this property either?"
Me - "Same as my last answer, I traded some land for that property and never made any payments."
Underwriter - "Your credit reports don't show any auto loans, is this correct?"
Me - "That would be because I don't borrow money to buy cars."
Underwriter - "You claim retirement income, yet you show business income on your tax returns?"
Me - "That is because after I retired I started a business and still run it today."
By this time I was questioning my own sanity for even answering this guys questions. I remembered that this was not my idea in the first place, I was merely trying to keep peace in the household.
Underwriter - "I have a few more questions, then I will need to fax you a few more forms to fill out."
Me - "No, just keep your damn papers and your loan. You caught me, I live in my mail box and don't have a primary residence or a job. I escaped from a nut house in Washington State and I just travel the country applying for loans so I can deal with idiots like you. You need to go screw with someone else's life," and I hung up the phone. I have still to break the news to my wife that there will most likely be no refinance on the rental house, at least from this lender.
Low interest rates are a fine thing, but it appears that few if any lenders have much desire to loan money at these rates. So don't believe everything you hear about how great these rates are and how you are foolish if you don't take advantage of this great savings. It is not worth the hassle and the time you must invest. I'm sure I have not heard the end of this, but at least I feel better about it after remembering I didn't care if it happened or not.
Perhaps my experience was unique and others have had success in getting refinanced at a lower interest rate, but I tried and and so far have failed.
UPDATE: Today, 9/14/11, I actually was granted this loan and signed all the required papers at the title company. I guess sometimes telling them you really don't care if you get the loan or not works in your favor............
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Hey neighbor, welcome home from the corn fields of Iowa. You ever notice when anything starts with EZ, it is probably not?
Talk about frustration. I have no idea why I put myself through this ordeal. I'm supposed to be older and wiser than this.
Mike I am totally familiar with your experience. I worked as a real estate broker over 30 years and I told the borrowers that if they could withstand the idiots at the bank they would get the loan. It was a contest to see if you could get dumb enough to suit them. Their object was a thickness of a stack of paper, if it was thick enough then they could pass it to the next idiot if not then they would have to add more paperwork to the stack. I also told them never volunteer any information, it would only cause trouble (they are easily confused), they don't want to hear anything that is not on the forms. You have to understand that the people they hire are not supposed to have any brains otherwise they wouldn't work for slave wages in a bank. You can do it your much smarter than they are, Your friend, Peter
Peter - I appreciate the comments and the vote of confidence. However, I think I have met my match with this particular idiot that works at a bank. It seems they have swung the pendulum all the way when it comes to approving loans. For awhile they were giving home loans to unemployed homeless people, and now they just don't want to approve any loans at all. The only cool part of this is I really don't care if they approve it or not. I also know they had to kill at least two trees to make the paper for the first batch of forms I filled out, then he says there are a few more forms necessary? This should prove interesting.
Mike, I miss those papers like a thousand crotch fleas....
I feel your pain, seems refy closing cost, title insurance and all would be 5 years amortizing unless you have 9,75% plus rates and are going to 3, just my trying to remember details of 20 years back, dust
Dusty, your memory serves you well, it is still a huge pain in the rear, and I'm not convinced the savings are worth the pain. Thanks for the comment.
Now what to tell your wife? And keep the peace in the household. For me, ( I have an intellegent wife) I'd tell her that they had too many "Hoops" to jump through and if she wanted to play their game she could pursue the matter. In the end, they mess around with the interest rate too.
Still chuckling. I too toyed with the idea of refinancing a mortgage, only to be told the program is not being applied to Florida because the state's real estate market is in such a mess. I recently read that one in five home sales in Port Charlotte sold for under $50,000. These are three bedroom, two bath homes... I know many young families who paid $250,000 to $300,000 here in Florida who now face the reality the home is worth about $50,000.
So the bottom line is this: a government backed program designed to alleviate the pressure on home owners facing financial difficulty is not applied to the one state that needs it the most. Way to go!
Great hub. Rated up. Lynda
@RJ - Thanks for the advice,but sometimes the less said the better.
@Immartin - Yes it seems they only want to loan to those who don't need it. Strange the way they work.
You could sell this one to "Saturday Night Life"...what a joke Poolman. We are so happy to no longer have a mortgage, both cars are paid for and if we buy a 2nd home in Fla. it will be for cash. We never in this Life time want to deal with those kinds of Idiots again! Good, Fun (Ha) Hub, I look forward to following you and hope you will check out Me as well!
b. Malin - I can only imagine the pain for those who really want to refinance, or heaven forbid are trying to buy a house. I am old enough now I should never have to deal with these idiots again, and shouldn't have this time. How hard would it be to check someones credit history, income statements, and make a decision? I think even I could learn how to do this.
Thanks for the comments and I will check out your hubs.
Great Response to the lender.
They must assume that folks will tolerate anything in order to get a loan. Maybe some will, but, any business relationship that starts out with the level of lack of respect indicated by that interviewer is probably doomed to future problems anyway. It was smart to walk away.
Have you considered upping your principle payments as an approach to paying it off sooner?
FitnezzJim - That is exactly what I am going to do, just double up on the payments and forget the refinance. It was really an interesting session on the phone with this guy. They have my credit history, two years of tax returns, and my entire payment history with the existing lender on this property. What more could they possibly need? The main issue seems to be that my physical address and my mailing address don't match. I am through playing this game and really surprised the guy when I told him to just keep their money.
I hate to say I'm laughing but your presentation is awesome. Obviously you were dealing with an idiot. Also obvious is the fact that banks have no desire to lend anybody anything! Voted up useful, interesting, funny and awesome!
BP - Thank's for your comments. I am convinced that banks are mandated to take loan applications, but have no desire or intention to make any loans. In my case, I didn't really need the loan, but I feel badly for those who do need financing and can't get it.
After giving this more thought, I may not give up this easily. I know I more than qualify for this refinance, and may just make their life miserable until they approve the loan. If I don't force the issue, they win and I and many other lose. Banks were given piles of money to help get the economy moving again, but most banks apparently just decided to keep it for themselves. Thanks, now I have a mission to accomplish.
We refinanced and signed a mountain of papers. I hope I did not sign away my first born.
WillStarr - It seems if your mailing address and your Primary Home address match, there is no problem, they have tons of money to loan. It is only us rural types with an address mis-match that cause a problem.
OP, the number of people who act responsibly when it comes to finances are not very common. I think that is why loan officers always tend to act suspicious when they come across one. The average guy would have had an easier time. What world we live in!
caltex - I appreciate your comments. Yes, it is a strange world we live in now. I think I will keep messing with them on this one just to make their life miserable. I appreciate your visit.
Here's one for you. I have 2 five acre tracts of land, side by side. We are allowed to put 2 homes on these 2 five acre tracts. I have one home that i live in with a small mortgage remaining on it. The second 5 acres is paid off. So, i decided i wanted to put a new home on the other 5 acres and rent this one out so the rental income would pay my mortgage for me in my new home. (So far this sounds logical to me).
So, i started applying for these EZ mortgage loans that you talked about (and even some conventional real estate loans).
What a joke. I wanted enough to build a small 2 bedroom home, add the small mortgage that still exists and the small balance i still owe on my automobile. The total amount that i wanted to finance was approximately 60% of the worth of both properties together, and totaled less than $100,000.00.
I could not get these people to understand what i wanted to do. So i just said, leave off the amount of the auto and finance the new home, add the existing mortgage balance, and you will have the 10acres of land as collateral.
(I would be making out better in the long run doing it this way anyway.)
They were totally confused and told me they never had anyone ask to do this before and would have to look into it. When they ALL called me back, i was told in order to do this, my interest rate would be much higher, and the minimum amount i had to borrow was $110,000.00 (75% of the market value for the 10 acres with 2 homes on it). I told them i did not need that much money. After arguing this point a couple of times i said: OK i will take the $110,000.00 (thinking i would take the excess amount and pay it back onto the new mortgage to lower the principal amount). Then they wanted to know why i would be asking to borrow more than i need? W.T.F.? Since they thought i was trying to pull a fast one on them, they said they could not help me because i could not borrow more than the amount that it takes to build and refinance, and their minimum mortgage loans had to be at least $110,000.00 to qualify for the low interest rates. Does this reasoning make sense to anyone besides the bank? I said this was the dumbest thing i ever heard of. Their replies were all the same.= You can thank Mr. Obama for that, these are his rules, not ours. now a double W.T.F.?? Only in Florida are the bank officials as stupid as the politicians.
Now,i do live in Florida, and have somewhat of a half a brain, but i was beginning to think that i was suffering from Alzheimer's. So, like you, i told them to stick their money where the sun doesn't shine.
Needless to say, i probably will NEVER ever be able to finance another piece of real estate in this state again.
d.william - Thanks for stopping by and a really good laugh. I am only laughing because I have been there and done that. Nobody would understand who has not tried this EZ Refinance for themselves. Most of us have always assumed that bankers are pretty smart people, or they wouldn't be bankers. Rule number one, never assume anything. You no doubt had the necessary collateral to back up the loan, and I did. But this makes no difference at all to the banks. What happened to all the stimulus money that was going to be available to loan out to get things rolling again? Your financial planning makes a great deal of sense to me, but I am not a banker, nor would I want to be. Thanks for sharing your story, it lets me know I was not alone in this battle with the banking idiots.
Being a lending officer, I understand the reasons behind some of their questions. However, the fact that they did not read all the information you were required to put on the app, shows poor ability on their part. Lenders and load officers today have to justify the loans to cover their butts, because they are scored on the number of loans given out, the revenue returning and the loss suffered by the bad loans. Banks are harder on the lenders than the customers. If the score is more than 10% loss they lose their bonus and if it falls below 25% they lose their lending status. Take a look at E-loans, you might be surprised at what they can offer. Great and humorous hub!
must65gt - Thanks for the comment. It was a rather frustrating experience to say the least, but I can understand why they would be very cautious in today's world. It ended well as I was able to get a very low interest rate and less years on the mortgage.
TheManWithNoPants Level 7 Commenter 8 months ago
(Laughing My Ass Off) Man I love it Mike. Yeah, the credit's easy. It's the jumping through the rings of fire like a trained poney that make it difficult!
jim