What are the banks doing with BILLIONS of American tax dollars? Why, they’re going on vacation, of course.

By
Real Estate Agent with Better Homes and Gardens Real Estate Metro Brokers

 

The banks are on vacation after federal bailoutsIs it just me or is this happening to others too? On three of our recent deals, something rather unique has happened that derailed the closing at the last minute.

On all three occasions, sudden conditions miraculously appeared during the final hours before closing. When we asked why these issues suddenly became significant we were given the same explanation:

“The original underwriter went on vacation and when the replacement underwriter looked at the file they discovered the problems.”

What??? One could understand this happening once, but not three separate times over a three week period.

So I’m thinking that there are only two possible explanations for the phenomenon and they both involve billions of taxpayer dollars.

One is that the banks are so flush with cash that they really don’t need to make loans to stay in business. Why would you care about customer service when you can easily get the money for doing nothing?

The other is that they really are spending the money on vacations and the good life. Obviously, they are not using it to make loans.

Whatever the reason, the poor homebuyer is left in the lurch as the “vacation” shuffle continues. It must be nice to have such liberal time off benefits.

In the meantime, loans are lost as contracts expire.

No problem, they know where to get the money.

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Lizette Fitzpatrick 04/09/2010 10:24 AM
  2. Joseph J. Chang 04/09/2010 12:45 PM
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Rainmaker
182,202
Janet Guilbault
RPM Mortgage, Alamo Home Office - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Richard, you wrote this:

If the underwriter can suddenly determine that there is more money to be made by selling the loan to a different investor that needs additional documentation, then be honest about it!

This is off base. The loan is locked to a specific investor by the loan officer and then submitted to the underwriter to get underwritten to the guidelines for that specific investor.

The underwriter does not care if more money can be made by selling the loan to a different investor, and has no authority to simply switch investors (for any reason).

It is unfortunate that conditions have worked their way into every little step along the way of the loan. I know how frustrating that is. Please know that it is NOT the fault of the underwriters.

The job of a smart and savvy loan officer is to stay ahead of the underwriter by making sure all the cans of worms stay tightly closed, and by solving conditions before they ever have a chance to arise.

Apr 09, 2010 03:48 PM #48
Rainmaker
112,003
Claude THOMAS
Rossman Realty Group - Cape Coral, FL

Vacationing with Americans' billions of dollars? Well...duh...

Only in America. Isn't it a great country or what? You can legally get other people's money and take some time at the beach with it?

Now, if tomorrow you receive an official letter from the government, with a $10,000 check for vacation, explaining this is coming from taxes' payers, will you return it without any thought? What about a $100,000 check?

Apr 09, 2010 04:18 PM #49
Rainmaker
221,209
Ellie Shorb
Coldwell Banker, Ellie@CBmove.com - Bethesda, MD
Realtor DC, MD & VA Luxury Home Expert Top 2%

I agree with Sara above that your relationship with an in house bank could help your clients. I certainly would be scared to let a buyer use an online financing co where one has no idea what human beings are following the deal from start to finish....

The same holds true for title attorney's offices... if someone has my clients's file, I expect that they will pass pertinent info to a colleague before heading out for vacation. Not too much to ask. Nature of the business to need to work with someone who knows the deal/file.

Apr 09, 2010 05:29 PM #50
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Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

Janet...

Then how is it possible that two different underwriters can see a loan so differently? And if the investor has specific requirements from the get-go then why are they only uncovered on the day of closing ... and why does it take another two weeks to close once the documentation is supplied?

I once attended a closing for an agent for which I was the broker-in-charge. At the least minute the lender wanted to make certain that the earnest money had bben paid in a timely way and was deposited.

I had a copy of the check, the deposit slip, and since I was the responsible broker I said that I would sign an affa-davit assuring the check had cleared. (after all, by that time I was responsible for the money anyway.)

Not good enough.

Apr 09, 2010 05:36 PM #51
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Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

And isn't it crazy that a major, national bank would admit that they didn't care enough about a customer to interfere with an employee's vacation?

And I have one more question ... who is the bank's customer ... the borrower or the investor?

Obviously it's not the borrower because loans are lost because they do not close on time and the big banks response is simply: "We don't care."

Apr 09, 2010 05:42 PM #52
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Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

3 times is a crazy coincidence! Must be enjoying some island cocktails somewhere.

Apr 09, 2010 05:50 PM #53
Rainmaker
853,032
J. Philip Faranda
J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY - Briarcliff Manor, NY
Broker-Owner

I wish I had the vacation schedule of most banker and lawyers who work on my files. Must be nice. 

Apr 09, 2010 06:16 PM #54
Rainmaker
683,647
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

Hi Richard,

I had a problem like this last summer.  I had four closings that were just insane.  All with the same big-box bank.  It wasn't vacations - but the effect was the same....contracts expired, tempers were short and the banks were telling us to just be "patient."  If I heard one more time that there was "one piece of paper missing" one more time I was going to scream.  Among the problems....

1. Paperwork was missing FIVE TIMES - the closing was delayed five times and over one month.  Each time the deal was almost lost.

2. I had the listing, but the buyer couldn't get from the commitment letter to clearance  for over 9 weeks. The closing almost didn't happen.

3. A client with 60% down was held up for 8 weeks over an $80k loan because it was a cooperative and they were holding back over the flip tax.  The flip tax was less than $1000.00 - did I mention that the buyer was putting down 60%?   Ya gotta be kidding me!

4. This one was the best.  The bank held up the loan on a cooperative over fidelity bond insurance. I ended up calling every listing agent in the building (5  in all) to tell them to tell their sellers to lean on the cooperative board to up the insurance.  The board complied. BUT because they were at the end of the contract period - the bank tried to raise the interest rate AT THE CLOSING TABLE.  "Oops you are paying 1/2 a percent more for life because WE held up your loan for 12 weeks...so sorry!"

I had one other closing with that bank.  This time the LO was great - he got everything done - so I though "GOODY! a decent LO at this bank!"  Then he LEFT that bank - siting that it was too hard to get anything done!

Apr 09, 2010 07:55 PM #55
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

On the ocassions when I sit down for a little Blackjack in a casino, I do really well... until the dealer takes a break.  And then I suck... until the regular dealer gets back. 

Same thing?

Apr 09, 2010 09:23 PM #56
Rainmaker
437,367
JL Boney, III
Russell and Jeffcoat - Columbia, SC
Columbia, SC Real Estate

It's a really good possibility that you are right on both of those theories my friend. One day the madness will hopefully stop.

Apr 09, 2010 09:57 PM #57
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

It just seems to keep getting harder and harder for a buyer to obtain a loan no matter how qualified.  Perseverance helps some, but it's frustrating.

Apr 09, 2010 11:30 PM #58
Rainmaker
402,023
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Richard:

I think Steve's comment is interesting.  I also feel this way about attorneys who drag their feet or otherwise jeopardize the transaction.  If everyone were paid on commission-only, there would be more motivation to achieve a successful outcome. Since, without one - there would be no money for their vacation...

 

Apr 10, 2010 06:51 AM #59
Rainmaker
2,011,801
Gabe Sanders
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

We're having many of the same issues here Richard.  It seems that the underwriters now can overrule appraisers, inspectors, and every one else in the transaction.

Apr 10, 2010 07:26 AM #60
Rainmaker
226,979
Jonathan Benya
Keller Williams Select Realtors - Waldorf, MD
MD Short Sale Specialist

the whole situation makes me sick.  How can they still be getting away with shell games like this?

Apr 10, 2010 08:30 AM #61
Rainer
238,814
San Antonio Texas New Homes for Sale
www.sanantoniotexasnewhomesforsale.com - San Antonio, TX

Hi Richard,

 

After reading your post and all the comments .....Seems things have not changed in the last year and a half.

You kinda wonder when will it REALLY effect us......how many more surprises to come????

Apr 10, 2010 08:33 AM #62
Rainmaker
1,369,823
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Richard.....

What we are not reminded of enough is that the banks are a business run by CEO's and Presidents who are accoutable to their shareholders first..... and then everyone else. In addition, they know not what they do....

Thank you for your informative post.

Apr 10, 2010 01:53 PM #63
Rainer
147,546
Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA

With those kind of attitudes, no wonder businesses are moving overseas.  I can't believe the bonuses these executives are receiving.  Some of the bonuses they receive most of us would not make in a lifetime.

Apr 11, 2010 01:12 AM #64
Rainmaker
746,006
Jackie Connelly-Fornuff
Douglas Elliman Real Estate in Babylon NY - Babylon, NY
"Moving at The Speed of YOU!"

It's getting to the point where banks will want DNA samples in order to close. It's beyond ridiculous already! Banks really need to be more regulated.

Apr 11, 2010 07:21 AM #65
Rainmaker
148,701
Linda Lohman
Fonville Morisey Realty - Cary, NC
Former Teacher/Broker

It's always the little guy isn't it?

Apr 11, 2010 05:25 PM #66
Anonymous
Anonymous

The topic of 'IRA Transcripts' being required by lenders came up in sales meeting this morning - supposedly you can go online and get them but 2009 isn't available yet.....it's always something.

Apr 20, 2010 11:08 AM #67
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