Homeowners who hit a wall of mortgage refinancing delays, frustrations and rejections. Feedback from our readers.
Show Date: November 25, 2009
Paperwork that should have been completed in weeks can take months – assuming the refinance papers aren’t lost, the person in charge hasn’t been fired and/or the bank doesn’t drown the homeowner in an ocean of new or impossible demands.
Scott R. alerted our readers to the importance of reading the small print in “revised” mortgage contracts – along with tricks of the trade employed by appraisers. Case after case sadly suggests that the unstated goal of the mortgage finance game is to trick and derail the consumer as often as possible.
I started to refinance in April at 4.625 with a 4.875 APR. They raised it to 4.875 with a 5.00 APR when I signed and mailed in the contract. I didn’t catch it on time. They gave me a horrible appraisal; the appraiser said he had to appraise for worse case scenario. The house next door, a perfect comp, sold for $15,000 more two days after my appraisal…
Another reader asked: Is there a law that protects the consumer regarding a limit on how long the bank can take to close?
Debra L wrote on November 21, 2009:
I started to refi on May 15th. I provided every doc they wanted. I’m not behind on payments, have a good job and good credit…They left a message at work this week stating the appraisal expired, and basically wanted to start over..
Unfortunately, as we wrote to Debbie, to the best of our knowledge, there is no such law.
And Julias of San Diego went through a similar fight. He had an excellent credit score, was strung along and then told he didn’t qualify because of an investment property that he had fully disclosed at the outset.
I live in San Diego, but do not own a home here. I wanted to purchase a home in Tennessee. I went online and started the BOA No Fee Mortgage process. A BOA representative called me, assured me that I qualified, and submitted my application. I set a closing date for approximately 30 days out…Further, I already had an investment property in the same city in Tennessee; and I made that perfectly clear to the BOA employee who took the initial application.
Ultimately, Ms. Cory was assigned to my loan application. Over time, and in a timely manner, I provided her with all of the documentation requested. Two days before the closing date, BOA, via Ms. Cory, said that I didn’t qualify for the loan because I already own an investment property in that city…
In many cases, the loan officer retires, is fired or simply loses the paperwork. Cassy S. told us on November, 16, 2009.
My mortgage company was sold to Bank of America around February of last year, which they failed to tell me as I started my refinancing process. I applied for my refi in March of 2009. I was told it would take about 60 days. After calling and calling and never getting a loan officer, finally in June someone contacted me telling me they where expediting my loan and I should close in about ten days. But after almost six months I needed to refax my job info. Fine, so I do that three weeks later and still haven’t heard anything. I called and no one knows where my loan is, and I still haven’t ever been given a name of a loan officer…
Appraisals are a common tool used to derail the borrower. Megan’s horror story may sound familiar.
We were suppose to close tomorrow, but they called and canceled the closing when it was suppose to be 23hrs later, to say they want to review the appraisal that was ALREADY signed off on, back on the first week of Sept!!! We’ve had 4 extensions on this place and our tomorrow it expires and we’ll have to apply for a 5th! During this time the selling bank and B.O.A. have been putting us through the ringer, we should have been able to close last month at the latest but no one on either side could manage to sign papers and send them in a timely matter to where they needed to go… (listen to the show)
Banks are also processing mortgage refinance loans by email. A single email request for a particular form is understandable, but conducting a lengthy process through this “open” medium could pose a possible security risk for the borrower. Emails, as we all know, can be hacked and intercepted.
Michael Taylor wrote:
In April 2009, I began a refinancing process with Bank of America (formerly Countrywide) and have yet to close the loan. In the course of action, I have repeatedly faxed unnecessary documents to BOA. A Verification of Employment was presented to BOA, but nine days later I was asked to resubmit another VOE because it had expired. Another prolonging procedure I encountered with BOA is their failure to collectively send all required documentation for signatures. Instead I received individual emails from BOA in attempt to lengthen the process….