Less than ethical lender

[Lesley J.]

I know many of you are in the lending business and I know most of you have good ethical practices. I am hoping that what I am about to post is an exception, however I want to bring this to your attention.

In January I applied to refinance my primary residence on which I am paying a 5 yr note at 12%. (only in year 1).
At the same time I also needed to refinance from a hard money loan on a property that I currently have for sale.

My profile is: Good Credit, No unpaid loans ever, DTIR within guidelines, stable background (same employer 14 years) and good salary ... so... both properties owned more than 12 months.

This lender approved the loans, they then proceeded over the next 4 months to apply conditions 5 (yes 5 times!). They had my CPA write two letters stating that I don't file a business tax return, they required me to get a custom letter from the power company to prove that i had been living at my house for a year, they told me that the account information that clearly showed the dates was not acceptable and only a custom letter would do. Over the period of time they requested 3 (yes 3!) appraisals, all of which came in with an appropriate home value for the loan. I had to write a letter explaining why my name changed (i have been married more than one time). They requested title searches on all the properties that I own... and the list goes on..... this is by no means all of it.

during this time the hard money lender graciously extended my loan on the investment property, although the extension costs were high. I have actually had 4 appraisals over the period of the application. 3 of which I paid for....

So, at the last minute (4 months after initial application) they told me that they would not lend on my property (my primary residence) unless I finished installation of my kitchen cabinets, kitchen sink and a few other miscellaneous items within 1 week. Impossible to complete! My house needs some repairs (i am renovating) but is mostly already updated, and has several working bathrooms and all the items needed for a refinance. The information regarding these repairs has been in their hands since the first appraisal was submitted. They continued to tell me they would lend, and even subsequently ordered the 2 more appraisals.

Additionally apparently there is a gas meter missing on the other investment (a rate & term refi), and they told me they would not do the loan unless the gas meter was replaced. I don't know how long this will take but they were supposed to close on Friday and now this!! The house is awesome, granite counters, hardwood floors and the works!!

At this point it is fortunate for me that I was able to put something together and pay off the hard money loan today, since I told this lender to take a hike, I cannot meet their impossible conditions. However i'm am left with some large losses in holding costs and I am out the cost of 3 appraisals.

I know this is a bit of a get it of your chest post, and somewhat cathartic for me, BUT I call Borrower abuse on this one! I'm not going to say what lender this was publicly, but I will tell anyone who cares to privately contact me, so that i can warn them. This practice of foot dragging at the borrowers expense, and abusing the privelege of requesting borrower paid appraisals must be stopped.

L...

[Don Konipol]

All lenders have suffered servere losses in the past three years. Most have instituted procedures which make obtaining a loan for anyone outside of a narrow definition a very diffcult and frustrating process. Some of this is due to changes in underwriting standards during the loan process, some from the fact the the personnel may be unfamiliar with the new underwriting criteria, the rest due to bad oversight management.

I find some similar frustrations when dealing with the medical establishment. When the process becomes a stramlined factory like operation, any deviation from the mean will be a long anf frustrating experience.