At the end of June I called a mortgage broker to have one of our investment properties refinanced with a cash out. They told me they can give me a new first mortgage at 8.125% and a second mortgage at 12.5% to get the cash out we needed. My husband and I are self-employed so we want it this done as a stated income-verified asset loan.
Their initial proposal and the terms seemed reasonable to us after checking with a few other brokers so we have gave them the go ahead to precede with the loan with the rates locked and that's when we have learned that all of our troubles just started...
We have received loan documents and disclosures in the mail first week of July and the loan programs and the interest rates were not what we have agreed on. When we called to inquire they said not to worry this is how their system worked. Then they have proceeded to inform us that their system is having trouble pricing our loan out as a four-plex and that they need to contact the lender. By the way pricing has also changed since the original quote from almost three weeks ago from 8.125% to 8.625% on the first mortgage and they needed to charge two points origination instead of one. Also, the rate on the second mortgage has gone up from 12.5% to 14.25%. They have already checked with other lenders, so this is the best rate at this time.
We were outraged and asked for a supervisor. She told us that; “We can’t get the 8.125% rate, which was back on June 15th, not today. They don’t lock rates when they do pre-qualifications. They can’t lock rates until disclosures are in and loans are run in the lender’s websites. Between that time the rates have gone up everywhere. We are in a very volatile market and she will not be responsible or be held accountable for increases in rates.” I have reminded her that this was almost a month ago and we are supposed to close on our re-finance in two weeks.
She noticed that I was very upset and angry, so she has offered another solution. She has found a lender that would do the first mortgage at 8.8% but with a 40 year amortization, which would keep our payments about the same as the original quote but this program requires 12 months bank statements. We have agreed with her to proceed.
The following day we get a phone call from a processor wanting to know what we actually do in our business. Do we receive investment income and if so, do we have an actual management company like a brick and mortar? Unbelievable!-I thought this was clear when we have applied. Clearly, the left hand doesn’t know what the right hand is doing.
So, by know it’s July 18th and I went down to our bank got copies of our past 12 months bank statements and gave it to the broker. After several phone calls and E-mails from the processor, I get this phone call from the supervisor again: “We are not coming up with enough income to make this loan fly. I just went over the numbers and in talking with the lender; the bank statements aren’t documenting enough deposits. The lender will only allow us to take 75% of the total deposits since these are business bank statements. Based on the insufficient income, this file should be cancelled. We have run out of options for you.”
Nice, this is after a month of messing around with this loan. We are done with these people, unfortunately what they do not and continue to refuse to acknowledge is that their role in not getting the information into the lender in a timely manner so that the rate can be locked ASAP. Have they done that, this whole situation would have been avoided. We did not expect to get the pre-qualification rate, but a rate that was close due to the fact that we have done everything they have requested in a timely manner.
We have submitted our file to another local broker with similar results. They were unable to help us, but we have learned our lessons from the previous experience and this time it didn’t take us more then a months to figure out that they aren’t going to perform.
Finally, through a recommendation from one of our business partners we have contacted a local mortgage bank the Toth Team with the following outcome:
“The Toth Team got an investment deal done when two other lenders could not. The time wasted on the previous two lenders cost me money and time I didn’t have. I’ve found a new, investor-friendly lender that does what they say they can do!”
-Brenda Hannu, Real Estate Investor |
