Bank of Misery
October 13, 2009
I was supposed to be in Idaho this week with Mr. Karen to close on our ski condo. Thanks to Bank of America, we are not in Idaho this week. Thanks to Bank of America, we wasted hours and hours of our time over the last six weeks and incurred hundreds of dollars in extra expenses. Thanks to Bank of America, we have had to scramble to get an extension on the purchase agreement and start over with a new bank (who shall remain nameless until we see how things work out with them). In future, if offered a choice between trying to get a mortgage from Bank of America or shoving an ice pick into my own eye, I’d seriously consider going with the ice pick, as I think it might be less painful.
We chose Bank of America because a) their rate and points on the type of mortgage we wanted was lower than other places we checked, b) we already have accounts with them as a result of our banks being merged into BofA, and c) getting an auto loan from them earlier this year was a quick and relatively hassle-free process. The application process went fine. I prequalified online before we went out to Idaho in August and then completed the application via telephone after we got back and got a conditional approval from the loan officer very quickly. The problems started once our file was turned over to the loan processing department. Communicating with our assigned loan specialist was extremely frustrating: phone calls went unreturned or were returned to a number other than the one I asked to be called at, e-mails and faxes were not responded to in a timely manner (or at all), what exactly was needed to get final approval was not made clear even when I asked what I thought were very specific questions about the open items. The most problematic issue was BofA needing to approve the condo project itself. Silly me, I thought having good credit scores, a sizeable down payment, and an excellent debt ratio would be enough.
Once I knew that there were hoops the condo home owners’ association was going to need to jump through, I tried to find out what the requirements were. In mid-September, after many attempts to get that information from the loan processor, she told me that the condo approval should not be a problem as long as the HOA filled out the form she was going to send to them, no one investor owned more than one unit, and no lawsuits were outstanding against the HOA. I knew the HOA met the last two tests and didn’t think getting the form completed would be a problem. (I asked for but never received a copy of the blank form so I could at least know what kinds of things they were asking forâ€”I understand from talking to the real estate agent who’d been in contact with the HOA president that it appeared to be aimed at large complexes with professional management companies and recent developer involvement rather than a single 5-unit building that was completed three decades ago like we’re buying into, where every owner is an officer in the HOA.) At this point, she assured me we were on track for our mid-October closing, so I did not pursue applying with a back-up lender. Oh, how I came to regret that decision.
On October 1st, we were assigned a new loan processor. Surprise! Not what one wants two weeks before closing. When I spoke to the new woman for the first time on October 2nd, I expressed my concerns over the condo approval not yet being done and she also assured me we should have that by October 6th at the latest and that we were still on track for our closing date. I left several messages on the 5th and 6th and got no reply, then on the 7th, a new requirement for an HOA budget showing adequate reserves appeared on our online status page (which throughout the whole process had a warning at the top that due to high volume, it might not reflect the latest statusâ€”gee thanks). “Adequate reserves” were not defined, so I asked and eventually got a confusing e-mail in reply. By the 8th, it was clear that the HOA was not going to pass muster even if we got them to draft a more formal budget. To say I was angry and upset is putting it mildly. Why the hell wasn’t I given a full list of condo approval requirements when I first asked? Why was there no way to pursue a waiver or let us fund the required reserve personally (I asked about both)? Why was I told repeatedly that we were on track to close on time if we were not? Just writing about it now I feel my ire rising once again.
Ironically, I got the most timely and copious communication from BofA after they’d decided they didn’t want our mortgage business after all. In the space of two days, the loan specialist left me a voice mail, sent me an e-mail, and then called again when I didn’t reply to her voice mail (no point in doing so at that juncture, I figured), then someone from the loan officer’s location called me at home, and finally someone from the underwriting department called me at work to let me know they couldn’t approve the condo project, which of course I already knew from the loan specialist.
So far it’s been much easier working with the new bank; I’ve gotten a real live person on the phone every single time I’ve called so far. We’re working with a branch manager who seemed to understand the condo approval issue and came back with an apparent solution a few hours after our first conversation. Gathering all the documentation was easier this time around because some of it was the same stuff BofA had requested. The biggest issue now is waiting for an appraisal; unfortunately the one that BofA had done is not transferrable. I don’t expect there to be a problem with the value, as the first one came back above our purchase price; I just hope there’s not a problem with the timing. The new bank is assuring me that we will make our new closing date, but I’ll believe it when we’ve signed all the paperwork and have the keys in hand.
(UPDATE 24-Nov-2009: I see in my stats that this entry is getting more traffic than I expected, so I wanted to make sure that non-regular visitors to my site know that Wells Fargo was able to get us to closing in three weeks from the time we applied. We even ended up getting a better interest rate than we had locked in with BofA. I believe it made all the difference to be working with one person who oversaw our loan from application to funding and beyond–I had a question last week about the property tax payment and got a response and resolution the same day.)