Lenders: Naming Names
Lender’s are everyone’s favorite punching bag but here I am going to relate some of my experiences good and bad. First of all let me start with my endorsements. Kudos to Brian Yotz the local branch manager at Golf Savings Bank. Brian took over and closed a transaction in less than eight days after another lender took six weeks and couldn’t undwrite themselves out of a wet paper bag. Brian was local and oversaw each step of the transaction to obtain this timely closing. The other lender derserving special mention is Wendy Mariani at Loan Central. Again she oversaw the process personally and did not hand it off to a call center. The underwrting was done locally and the loan was processed in less than two weeks.
Now for the Duds. The worst lender award to goes to Suntrust. This was a “call center” lender. Originally the borrowers thought they would get better service by going to the lender who held their present mortgage. Well as soon as they called their lender the call went into a call center and it took three days to get back to them I should have known we were in trouble then. The loan was being originated out of a call center in Virginia and it was apparent that there was a big disconnect in this process. The original processor handling the loan was trying to help. It took a couple of calls to relate the urgency of getting this closed and explain this was a short sale and the home was being purchased “as is”. The borrower was golden and she thought that she could help us to get this done. Well that is where things feel apart. There were two big problems. The first was they seemed to have a very convoluted process for determining the borrower’s downpayment and to verify that it was not borrowed. I won’t go into all the machinations to get this done but the originator in Virginia was very helpful and very frustrated. The second and bigger problem was that when the appraisal came in the underwriter in Virginia really hammered the property and wanted all sorts of work done before closing. Specifically the home was 5 years old and needed maintenance. It looked fine but needed a coat of paint inside and out and some lawn maintenance. Well when the underwritier in Virginia saw the appraisal he freaked and requested the exterior be painted, the inside painted, new carpet and requested a new driveway because of some cracking. Now keep in mind this home was perfectly liveable had no defered maintenance like a leaky roof, mold, etc. but was just not in great shape. By this standard 90% of the homes on the market would not be financeable by this lender. Bottom line we tried to work with the lender but we would do something and then a whole new set of conditions would come up. At one point in time I had a discussion with the call center manager if the lawn needed to be replaced or just mowed. Were the weeds “systemic” or could they just be pulled. Well after this conversation the borrower above went to Brian and got the home closed they requested a couple of things which were done promptly and the home closed.
The other lender which we have had general problems with is Bank of America. On one loan which was an old home in Seattle in order for Bof A to fund they requested the garage be torn down. This was an old detached garage that had sills rotted on it. It was not part of the house and more importantly it was a vested structure. The bottom line is that it had no connection to house and if torn down could not be built again so in the long run it would actually contribute to value. Generall the buyers rehab these things by jacking them up and replacing the sills so the structure remains vested. Well again this was an underwriter that was not local and she insisted the rot be fixed in the garage. Usually this is only done if it is attached to the house and can affect the house. No pictures or amount of “clarification” could make this situation go away and the closing date was near and a ton of people were interested in this home. Well the solution was simple we tore down the garage. That made the rot go away and the lender was happy. This is the first time I have had to devalue a property to get a loan. The other more general issue with BofA is their pricing is good on their jumbos and they say they will do a jumbo with a credcit score of 680 as opposed to the 720 required by other lenders but good luck getting it. Again the problem here is the huge disconnect between the underwriter and the person originating the loan.
The point to make about these experiences is that having the originator and the underwriter local is a big deal. The irnoy is that the mortgage companies seem to be doing a better job. They have their local underwriters and they communicate clearly with the originators. Also the local folks overseeing the loan are very competent setting expectations and overseeing the gathering of the documentation and appraisal. Also they order appraisals locally from well qualified appraisers that know the market and the “call center” appraisers used by many lenders is avoided. The irony here is that these mortgages companies often will sell the loan to a SunTrust or BofA but in that situation you have the local underwritier talking to the other underwriter. They seem to get things done much better. So work with local people. Avoid the call centers and stay out of that mess. If you are with a large bank such as BofA or Chase you can go into the local branch and think you are getting that service but the application is taken and turned over to the call center and it is then out of control of the local originators hands. These folks are well meaning but are fighting a system that is not responsive or flexible. When Glass-Stegall was repealed in 1999 the “call center” approach to banking took hold with a vengenace. This was the new model of efficiency. Central processing and underwriting. If your lender gives you an 800 number to check on your loan application of if they have to call one to get the status of it run.
As a consumer movement we should ask to get rid of the “call center” banking model. Tell Chase, Wells, US Bank and any other bank if you go into to see the manager and they give you an 800 number to go jump. Make them call their own 800 number and go through 800 number HELL. The branch managers used to be the ones who kept customers happy and did the follow up. Banks that have strong branch systems, like Chase, Wells of BofA are under utilizing the local branches. Think how quickly short sales could get done if handled at the branch level. When I say get done, I don’t necessarily mean approved. I mean that the short sale could be resolved quickly on what terms the bank would approve it. The process now of having to sustain a certain amount of abuse and wasted time is not efficient. Efficiency is not somebody reciting from a policy manual which is what happens at the call centers. This is turning into a rant so I had better end it now.
Bravo, very insightful comments. I too had an experience with the big bungling banks with no local help. Ironically my agent also recommended Loan Central in Bellevue and after 6 weeks of pain and suffering at the “big bank” I finally took my agents recommendation and went to Loan Central who not only closed it in a matter of 10 days- but got me a better rate for less costs and I appreciated the very helpful and detailed analysis from my loan officer. How can someone on the east coast know our market anyway?(really – that’s a questionid like an answer to)
Local does seem the way to go until the managements at the large banks figure out they are lending to people.