*** Update September 9, 2010 ***
Heh, it was just pointed out to me that I never actually included the *amount* I was refinancing… that would make the numbers below a lot more useful if you want to compare your situation. I was refinancing $125,000.
*** End Update September 9, 2010 ***
You would think that something as straightforward as a mortgage refinance would be difficult to cock up. Heck, they (mortgage brokers in general) been doling out mortgages for years without even checking if folks can pay them back.
So, back in early January I contacted my mortgage company (SunTrust) and dealt with George Connolly to get a good faith estimate for my refi. I also contacted Lending Tree and they put me in touch with exactly one person so that ended up being the extent of my “competitive bidding”.
It eventually came down to two identical mortgage offers at 4.5% for 15 years with a difference in the closing costs boiling down to a discount that I would get for working for my current employer if I went with SunTrust.
Ultimately, I chose the SunTrust option, partly because they were a bit less expensive on the closing costs, but also because I had other business with them.
Things didn’t bode well when I received my “official” package from them that had a “Good Faith Estimate” for closing costs fully $1,000 higher than what we’d agreed upon. George assured me that they would be working off of the Excel spreadsheet version.
Also of concern was the fact that the $350 appraisal fee was not listed on the Good Faith estimate originally and George used appraisal fee and application fee interchangeably.
I suppose I should have bailed at that point, but now that I was into the process for $350 (appraisal paid up front) I was kind of committed.
Originally we were supposed to close the deal February 3. According to George 2-3 weeks is all this normally takes at the outside. Come February 2 I got a call from him that the folks holding my Home Equity Line of Credit still had not made a decision regarding “subordination”. This, I am told, is where they agree that it will not be a problem for them to be 2nd in line for my house should I default. Since this is already the case with my existing mortgage it should be a no brainer.
I was told that the subordination folks are really backed up as so many folks are trying to refinance , taking advantage of the good rates now.
So we pushed off the close until February 10, 2009 (today). I got a call from George yesterday evening that the subordination decision *still* hadn’t been received.
I called the subordination group myself today and found that the paperwork had not even been faxed to them until nearly 4 pm on the 4th of February. As of today they’re only just dealing with requests received from the 2nd of February.
I am *pissed*. Not only was the subordination stuff not even *initiated* by the time of my first attempt at closing but they didn’t even come clean until I told them I knew exactly what had happened.
At this point I’ll be VERY lucky if this thing can close for Friday – that also assumes that I can find time out of my work day to make my way to the lawyer’s office to do the closing. Time I had already arranged for… twice … to make it to the earlier closing appointments.
I’ve had to pass on a great hardwood flooring estimate (with a closeout price on a flooring we were really happy with) because I did not have the refi in hand. I’m so glad I did not go forward immediately or I’d now be in trouble.
As it is, I purchased some furniture expecting the refi would be settled by the time the credit card statement came due. But, since things are all bolluxed up I can expect to see the proceeds of my refi *maybe* a week from Thursday (3 day recession period plus weekend and bank holiday Monday). Two and a half weeks after the originally expected close date.
This brings me to a general peeve I have about real estate and mortgages. Why does everything have to be so convoluted? Don’t these people do this stuff EVERY SINGLE DAY as part of their job? How can they all be so bad at it? Is there anybody out there who HASN’T had to scramble like a madman at the last minute EVERY time they have bought a piece of property?
Heck, over and above my current situation, apparently I’m the only one who’s ever read the initial paperwork that they send out to be signed. One of the forms, 4506-T “Request for Transcript of Tax Return” they sent pretty much blank and instructed me to sign it and send it back. They were miffed when I pointed out that the form itself even says “DO NOT SIGN this form if a third party requires you to complete form 4506, and lines 6 and 9 are blank.”. Essentially you are just giving out blanket access to ALL your tax information. Then they insisted Michelle had to sign it when I added her name to the form in accordance with the instructions ON THE FORM that she needed to be there if I file a joint return. The form even stipulates that only the one signature is required… *sigh*.
Geez. Anyway, I’ve got a call in to George’s manager, Barry Butler.I’ve asked him to expedite this refi. But nobody’s accountable for anything. I called him at 4 pm, it’s now 5:30 so I suppose it’s a safe bet that he’s not going to bother returning my call either.
Thankfully I don’t spend more than I’ve got so, with some creative juggling I should be able to cover the shortfall without having to cash out any assets that will lead to irretrievable losses (I think). But this whole situation could very well have impacted my credit rating (by carrying a balance on my card) and has definitely wasted time and effort on my part, both in chasing around the loan entities to figure out what is happening and in trying to secure a reputable contractor and a reasonable deal for the renovations we’re about to embark upon.
What do you think, should the folks who stand to gain from this refi (closing costs out the whazoo) be culpable for ANYTHING?
BTW, my closing costs for reference:
801. Loan Origination Fee $937.50
804. Application fee $350.00
808. Tax Service Fee $78.00
809. Processing $300.00
810. GA Residential Per Loan Fee $6.50
811. Flood Cert $11.50
1103. Title Exam $125.00
1105. Document Review $275.00
1107. Attorney’s Fees $199.00
1108. Title Insurance (lender) $250.00
1201. Recording Fees $50.00
1203. GA Intangible Tax $375.00
1304. Other (discount for employer) $(250.00)
Total Estimated Closing Costs $2,707.50
Note this doesn’t include the appraisal fee of $350
So I’m paying $3,057.50 (if this is even the final real tally) for the privilege of having my refi mismanaged.
** Update Feb 11, 2009 **
To his credit, Barry *did* call me later yesterday evening and left me his email address. So I sent off a note to him and George outlining my concerns. There is little they can do to right this SNAFU ’cause it seems that they have little or no pull with the Line of Credit folks but we’ll see if they at least can keep the rest of the process on track and maybe see to it that my closing costs don’t inflate when I’m in the lawyer’s office.
** Update Feb 15, 2009 **
I exchanged several emails with George on Friday. I cannot tell whether the Home Equity folks gave a decision on the subordination or not. But I *do* know that nothing happened.
Man, it’s just so nice to know that your lender really doesn’t give a crap.
I’ve spent the last hour or so researching Credit Unions but those seem to be quite the mixed bag. Generally, their published mortgage rates are pretty high, they don’t seem to have much in the way of connectivity (I like to pull my financial information down to my computer) and, of course they seem pretty limited on locations where you can withdraw your money. Anybody out there with a credit union that they can speak for?