Lending Horror Stories? Slow Closes? Share Them Here!

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Lending Horror Stories? Slow Closes? Share Them Here!

Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes

I've been dealing with a couple of property sales for the past few months and have horror stories to share! I won't get into all of the details, but in essence, in both sales, I've got HIGHLY qualified buyers with great credit, cash in the bank, good net-worth, high incomes, and low and behold, we can't seem to get these deals to close. In both cases, the buyers are dealing with mortgage brokers . . . in both cases we've gone MANY WEEKS past initial close . . . in both cases, after 3-4 additional weeks of lies and misrepresentations from both banks and these mortgage brokers, the loans did not come through. We're still trying to get loans on these properties with new banks, but I must admit that I'm at my wits end here!

I've contacted the offices of several people in Congress and they want to know who is is having these problems! I'm certain that I'm not alone here, because I've heard from others in the biz that that is not the case.

THE MORTGAGE BUSINESS IS IN COMPLETE DISARRAY
When qualified buyers cannot close on property, there is something very wrong!

Congress is currently holding hearings on the housing crisis and the mortgage industry, and we need for them to know what is going on!
If you, like me, has experienced a situation where perfectly qualified individuals can't get a loan, please post your story here!

We have people in Congress who want to know what you're going through and I am trying to get information together so we can present this to them.

Is your lender blowing you off? Are you more than qualified, but constantly getting rejected for loans? Is your mortgage broker lying to buy time? Are you a mortgage broker that is getting the run around by the banks?

If so, please share your story here!

[b]We must come together as buyers and sellers and let the government know that this is not okay!

Not only is this helping the housing crisis to worsen, but it is also bringing our communities and neighborhoods down![/b]

When people want to buy property to rehab and clean up, but are unable to do so, we all suffer!

PLEASE SHARE YOUR STORY HERE!

BTW - If you are a mortgage broker and have been having problems with banks closing, please also feel free to share your story here as well.

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  • Catherine Coy
    Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    18y

    Mike, if I may say, you have a rather droll approach to this business. I've noticed that you claim you've escaped the drudgery of having a J-O-B, then you recount how you "painted this apartment" and "unplugged the toilet" at that apartment. If that's not a J-O-B, I don't know what is! :lol:

    Personally, I like Ron LeGrand's edict: "The less I do, the more I make." It comes from the concept of super-delegation, as discussed in this best selling book.

    http://www.amazon.com/4-Hour-Workweek-Escape-Live-Anywhere/dp/0307353133

    Check it out...and best wishes!

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  • Michael Shadow
    Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
    18y

    Let's stay on the topic of banks and lending. If you want to continue the management style and 4 hour work week discussion please start a new thread.

    -Michael

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  • Michael Rossi
    Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    18y

    If by droll, you mean cynical, that's true. I have a very realistic view and approach to the business, because I actually live it every day. FYI, no, I do not consider working 3-4 hours per day, 3-4 days per week to be a J-O-B. I consider that to be semi-retirement. I don't know about you, but I'm not lazy enough to sit around and watch soap operas all day long. I actually like getting out of the house and doing something productive. I enjoy being outside on a beautiful day and doing a little painting. Today, I went to work a little before 11am and quit at 3 pm. Then, I went for a nice bike ride before dinner. A job - I think not!

    All newbies like the thought of doing nothing and having money fall from the sky. It's ridiculous, but it sounds good to newbies!

    Mike

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  • Michael Rossi
    Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    18y

    What were we talking about again?

    Mike

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  • Jack Bobeck
    Rental Property Investor · Jacksonville, FL · Member since 2008 · 784 posts · 528 votes
    18y

    I know a number of good title companies, but like bad realtors, or worse, I know a number of crummy title companies that were nothing more than wholesalers to get deals done. I have a package of 3 homes waiting to get closed by Regions because my title company is having to go back on 2 of the 3 properties and fix bad documentation on the previous title pages. I'd like to strangle some of these idiots or minimum wage workers who worked at title companies. Many, like realtors, just did not care enough to do the right work.

    Perhaps its all part of a bad cycle and we needed to get the bad ones out, and I mean all the bad ones. As it is, it took us 3 months to get 1 title company to send the title work to the Clerk's office, so that the official title would be seen in the Property Appraiser's office and for our other closing.

    I had one appraiser recently, who will receive a reprimand from the state, recently pull comps from 2 and 3 miles away from my property, when there were acceptable comps, per sq ft, less than half a mile from our property. he pulled comps from a different zip code, no less. Banks are just full of crud these days too with the games they are playing.

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  • Tracy Harmon
    Property Manager · La Mirada, CA · Member since 2008 · 38 posts · 0 votes
    18y

    If you have qualified buyers, why would you go to a mortagage broker?
    The only use for a mortgage broker used to be to qualify people who had no business buying a home.........hence the current meltdown, duh.

    0Reply
  • Daniel Macris
    Contractor · Atlanta, AL · Member since 2008 · 9 posts · 0 votes
    18y

    Wow. Some of these stories are nightmares!

    0Reply
  • C Folland
    Miami Beach, FL · Member since 2008 · 51 posts · 0 votes
    18y

    We have been pursuing a shortsale approval with Countrywide for six months now, and we get lied to and stonewalled at every turn. This, even though the purchase price is $1.6M cash, outstanding loans of $1.9M, and Countrywide's own appraisal at $1.2M. Seller has paid an attorney to chase around the corporate execs for weeks, and they all try to push it off on another department, refuse to approve for no reason, and then hide behind excuses. It makes no sense, as it is $1.5M cash recovery, whereas a foreclosure will clearly result in an expensive REO property that could take a long time to sell with substantial maintenance and taxes.

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  • David Diaz
    Loss Mitigation Specialist · chicago, IL · Member since 2008 · 15 posts · 0 votes
    18y

    I have a story about Citi Financial.

    I was processing a Short Sale that had To liens on it. The first lien was WAMU and the Second was Citi Financial, Balance was $24,000 (which was a Heloc). Per policy of WAMU i needed to negotiate with the Second lien holder before i can negotiate with them, which was understandable. So i Called Citi financial i had to negotiate with a Local branch manager for the Short Sale, which I found strange. So the negotiation started and the the initial offer was $2,000.00 to settle the lien. The BM first response was no that I had to give the the full payoff or the would not except anything. Which i went back and told her that the bank will get nothing and if it went to Foreclosure, they said Fine and they needed 80% to settle. So i went back to the investor to see what he want to give and he really wanted the property so he agreed. So the investor gives exactly what they wanted and per our convesation with WAMU the were willing to take big hit on the there LIEN and wanted to get it off there books.
    So i get the letter back from the BM with the "Payoff letter" and sent it WAMU. I get a call back with WAMU saying that this letter was not a Lien Release but rather a Settlement Statement. I call Back the BM telling her that we need a Lien Release from them that the First bank will not be able to work with this. The BM snaps back at me saying that she will not give us a lien release letter because she could not guarantee her that CitiFinancial will get paid if they gave me the Lien Release letter. I notify her that that was not the case, since i could not close with out that letter and i could not simply ripe the letter and walk away from the agreement. She told me know and that she would not do anything until i had a Closing date. Which i told her i couldn't because i still had to negotiate with the 1st and it was impossible for me to give her a date. She told me to call her when I had that.
    So them I called the Complaint Department and told them was going on and they transfered me to the LM, who previously did not want to work with me, since it was a HELOC. So i get a good guy willing to work with and so he sends a BPO out. About two later i call him and leave a message on his VM to get Status.
    About an hour later I get a call from a rep at Citi Financial be very hostile. They were like we are not going negotiate with you guys until we know what the first lien is taking, and they were getting 80%. In calm manner i told them that the first Lien holder WAMU is requesting Citi Financial to settle first before anything. She like they didnt care that it was their policy that they need to see what Wamu settles before they can even consider a payoff. I repeated to them that WAMU will not do anything until the did something and that by the choosing this action that the property will go into foreclosure and that CitiFinancial will lose everything and that the buyer was going to give them 80%. And she like :protest: they will not do anything and they let it go to Foreclosure. I called back several times and got the same reply from everyone.

    On i side note During the 6 months of back and forth the value of the property dropped 40%. I guess this was a blessing in Disguise.

    CItiFinacial is an idiot

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  • C Folland
    Miami Beach, FL · Member since 2008 · 51 posts · 0 votes
    18y

    I had a similar problem with CitiMortgage, which held both the first and the second mortgage in the transaction. The First was approved, and then we went to the second, which simply said no, and they would only accept a 10-yr note for $50K, which was 50% of the second. We told them that Citi Mortgage has both notes, and the First approved the substantial loss to FMV, but the second (Heloc dept) did not care. Of course it went to foreclosure and the second received nothing...everybody lost for no reason.

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  • Daniel F.
    Real Estate Investor · Member since 2008 · 60 posts · 2 votes
    16y

    I have a horror story with a bank that is a bit of my own making. I accidentally sent them a bank statement for the LLC which the house is not officially connected with. The bank recognized a large deposit and wanted tracking. It was quickly recognized as a loan to me and my deal is in hot water. I am on the other end of a loan for another property, but they don't think that provides any balance. It is all under review. Ugh!

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