Home buying process misery

I bought a house and it was the most excruciating experience of my life. Nearly everybody involved seemed incompetent.

Back in June, my fiancée and I put in an offer on a house. We had an inspector come out and look it over. Based on his report, we thought it would take a little work to patch it up, but it was nothing we weren’t willing to take on. A family friend who’s a builder took 15 minutes to look the house over and told us to cancel our offer and run like hell. There were pipes coming and going where they shouldn’t be, signs the bottom floor of the addition would be constantly flooded during the rainy season, signs the plumbing was shoddy, and the foundation was unreinforced. The only mention of these problems in the inspector’s report was that the bath drain was slow. Mr. Inspector, your job is to point out things that could be a problem in the future that I, as an office worker who’s never owned a home, wouldn’t recognize as strange.

My fiancée turned and ran in time to save our earnest deposit. We got back on the horse and were looking at new homes the next weekend. We found another house and made our offer. A couple counters later, we were in contract. We fill out the loan application forms, the disclosure forms, and send in copies of our financial information; the paperwork stuff we were expecting and were ready for. We sit back and wait. We call our loan officer to find out where our application is. The lender says it’s in the queue, which isn’t very descriptive. The time to remove contingencies comes, but we haven’t heard back the lender. After assurances from our agent, the loan officer, and the lender, my fiancée and I remove the contingencies, putting our earnest deposit at risk if something falls through.

And we wait. More calls to loan officer. More waiting. Finally, the Monday of the week we are supposed to close, the lender requests more information. They need a copy of my most recent bank statement, contact information for my previous employer, copies of permits for an addition that doesn’t exist, and confirmation that my fiancée and I have taken a home buyer training course.

Are you fucking kidding me? You know that the usual closing period for houses in the area is 40 days, and you don’t bother to look for 32 days? You sat on our application for four weeks without even looking at it to see if it was complete? You didn’t think you should mention the training course as part of the loan application? The reason you need an updated bank statement is because you’ve had my information so long it’s out of date.

As an aside, I consult and interface between corporations and government agencies. Every one of those agencies checks an application package for completeness in a timely matter, even if they won’t get to processing the information until several months later. When the government bureaucracy is making the lenders look efficient and responsive, it’s no wonder the lending industry is collapsing.

Clearly, we’re not going to close on time. My fiancée and I gather the information they need (some of which they already had), find a training course, and get an extension from the seller. A week later, the lender says they can’t contact my employer to confirm my employment. It’s nice that they let us know this in a timely manner so we can protect the earnest money we’ve already put at risk.

They’re five weeks in and they haven’t thought to mention they haven’t been able to contact my current employer. I called in to the phone number I provided to the lender. I asked for HR. I immediately received the person the lender needed to contact, who explained exactly which forms they needed to fax to a number I also provided.

The application eventually made its way to the underwriter, where I received a financial colonoscopy. They needed stubs from every deposit that wasn’t within a few dollars of the paystubs that I had already scanned and sent in with the application. This new requirement created several new problems.

I remember that one of the deposits was at least three checks from my employer I cashed at the same time. The problem is that no matter which stubs I put together, I cannot match the deposit. I come 500-1000 dollars short and cannot account for the discrepancy. I kept my stubs but I never imagined I’d need to record the date I deposited them. I call up my bank and ask for copies of the checks to be mailed to me. It will take them a week to send the copies.

One of the deposits was bonds that had been given to me five to ten years ago. Bonds don’t have stubs. I didn’t photocopy them before I deposited them. When I contacted the bank for the scans, the customer service person told me they only have scans of checks and that no scans were available.

A week later, the scans arrive. The money I couldn’t account for was the government stimulus check. I scanned and sent in the copied checks. A few days later, I was told the underwriter wasn’t going to approve the loan without scans of the bonds. At this point we were on our second extension with the seller and the seller wasn’t going to sign another, so we can’t try another lender.

I want to make this clear: the loan wasn’t going to be underwritten not because we couldn’t make the monthly payments, and not because we didn’t have enough left in our account after closing. We had about 10,000 more in the bank wants in the account as a safety net, but the underwriter wouldn’t approve the loan because there was a 3,000 dollar deposit and they needed to see scans of the bonds. Thank Og I didn’t ever deposit cash anywhere in the four months of financial information the lender required.

I managed to track down the individual who cashed my bonds, who is able to pull the branch records and provide documentation. Apparently, cashing 50 small bonds at the same time is unusual and memorable, so she knew where to look for the right information and was willing to help me out. So I managed to find the next item on the home purchase scavenger hunt list and send it in on a Thursday afternoon. Friday morning, I was told that the documents would be drawn for signing by Monday morning.

Reader, you think that is the end of the saga, but, alas, the saga continued.

On Monday, our loan officer called to see if the docs were ready for signing on Tuesday. There was no reply until Tuesday, when we were informed that our rate lock had expired and our rate would be a half point higher than we had been promised. My fiancée and I could afford the rate increase, but we’d be damned if we were going to pay 40 dollars a month to the lender because they dragged the process out so long the rate went up.

There were several calls over the next 24 hours. I gathered a list of agencies to file complaints with. I asked the lender to explain how this differed from a bait and switch where they promise a low rate, see rates go up, then delay long enough to unlock the rate. I never directly threatened to file complaints or accused them of bait and switch. Finally, we got the rate we were promised back.

We signed docs that weekend. For the next week, everything seemed to take a day longer than it was supposed to, which was a problem because the new rate lock expired that Friday. Wednesday, we we informed that the docs we signed had a problem; they referred to us as “unmarried” instead of “single.” They sent over a revised version, which we faxed the next day. The problem is that the lender lost the fax. It was the fucking day before our rate expires (again), the paperwork needed to be in before Friday afternoon for everything to record, and they lost the fucking fax. After we called them and were told “It’s here in my hands,” they lost it.

Friday, we refaxed the document. And we waited. We called to confirm that everything would record. Our loan officer called to confirm everything would record. 5PM came and went. Still no word. Finally, on Monday, we received confirmation that, oh, yeah, everything did record. Thanks for letting us know.

So nearly a month after the original closing date, my fiancée and I have a house.

Lending is a strange fucked up microcosm of the economy. If I were as unresponsive to my clients as the lender and underwriter were, I’d never get their business again. If I don’t start a project in time to complete it on time, I won’t get any more projects from that client. If I contacted my clients every week with a new information request for the same project every week, I’d never get their business again. If my client had to resend the same form no fewer than three times, I’d never get their business.

You’ll have to live with my spelling and editing mistakes. TLDPR.

Man it made me tense just reading that! Why did they need documentation of your deposits? Did they think you were laundering money or something?

We’re about to enter the house buying fray once again and reading this reminded me how much I’m not looking forward to the process.

Good luck with the new house :slight_smile:

Well, my sincere sympathies on that excruciating process. I’ve bought a house two times now, and both times (including screw-ups by the bank) it was about a tenth as difficult as yours was. Was all that difficulty just from your particular lender, or is that par for the course where you live?

Oh, we used a mortgage broker for our last purchase - he was extremely professional and competent, coming right to our house to sign things and being very reachable.

I’ve always though it odd that everyone recommends house inspectors, when they acknowledge in their contracts that they are worthless.

And the mortgage process is indeed a treat. There is an assumption that everything will just magically come together at the last minute. And usually it does - but it sure seems designed to maximize the stress on the borrower.

You have to go on a course to buy a house?

Can someone explain why this should be and what is the syllabus.

If someone makes a bunch of unsubstantiated deposits, they may have just borrowed a buttload of money from someone to use as a down payment. The lender has a legitimate interest in knowing if the down payment is your saved money, or money you’ve borrowed from someone else.

They were concerned that the deposits were a cash advance on a credit card or a loan, or some other debt that I had taken on. Clearly, this would have showed up on a credit report after four months and logically they could look there to see what my credit was like, but logic falls outside their policy and they required the documentation.

As my builder friend explained, they are and they aren’t useless. They will point out damage (i.e. “The light appears to not work.”). You have to translate their observations into what is really wrong (i.e. The electrical circuit to the basement hasn’t been used since 1960 and the wiring may be ready to start a fire.). They have to walk a fine line between stating the facts (The light didn’t turn on when he flipped the switch.) and jumping to conclusions. Perhaps the bulb is burnt out and there’s no reason to not buy the house, but perhaps the wiring is ready to arc through your heart and burn the house down. If they overstate the risk, you don’t purchase the home, it appreciates 200% in a year, and you sue them, they can say they simply stated the facts.

The initial communications indicated it was an all day weekend course, which is not something you want to find out the Monday before you’re supposed to close. It turns out is a computer training course that involves reading about 4 hours worth of online material and taking a 15 minute test. Or, if you have two braincells to rub together, you take the test in one window while you read the answers from the course materials. To make the quiz additionally stupid, half of the material covered is stuff you’ve already done (i.e. getting a pre-approval letter). The other half is pretty obvious, but apparently some people can’t figure out you have to a) pay off the loan, and b) maintain your house. In any case, it’s something that needs to be disclosed well ahead of closing time.

Yeah, you are basically at their mercy, at all points along the way. You really have very little leverage, they know that you are going to jump through all of their hoops because if you don’t, you might not get the house! When I have bought homes the people I end up dealing with all seem to lack mastery at their assigned jobs. These are detail oriented jobs, but the folks I have met who are doing them are universally weak at details. (To anyone reading this that might be offended - tough rocks! Get you shit together!)

Borrowers aren’t the only ones that the lenders throw last minute shit on. I work for a collection agency and they are always calling us wanting proof that an applicant paid off a five year old bill, faxed to them IMMEDIATELY!!!1!!, usually because they are closing in ten minutes. Sometimes the bill we have is for a different person by the same name and they want proof of that, which is a major pain in my ass because we have no form letter for such a thing and I don’t have ten minutes right NOW to type a letter for them. Then they call back every ten minutes wanting to know if it’s done. I ask the same question - you’ve had this credit report for a month and right this moment is when you choose to actually look at it? It’s bullshit.

Sympathies. I’m not being snarky but I have bought lots of houses and never went through anything like that. Step 1 is always a completely pre-approved loan. Makes step 2-? a lot easier.

Even with a pre-approved loan, we’ve gone through almost as much bullshit.

We have to sign the loan docs by Thursday, or we start paying per-diem fines to the seller. And does our loan officer know where the docs are? No, he does not. Is he bothering to try to track them? No, of course not. He’s going to get his money any way, so what does he care at this point?

We jumped through a lot of the same hoops. I’m self-employed, so they were very leery about lending us the money even though I’m very securely financially. My fiance sends most of his money to his ex-wife, so yesterday’s hoops involved faxing them the third copy of his divorce. Even though we qualify completely on my income.

And still, we wait. We are getting very nervous that they’re going to start slapping us with several hundred dollars a day. We’re supposed to close in exactly a week, and I’m not sure that we will.

Aha…never thought of that.

Woah, my sympathies. When we bought our house, getting a mortgage couldn’t have been easier - I was actually surprised by the lack of bullshit we had to go through. One visit, our tax returns, and everything was processed without question more or less on the spot.

Maybe it was easier because we had enough for a substantial down payment, close to 50%. Not much risk for the bank (actually, the credit union) in that. Plus, it was my wife’s credit union, where she has been banking for many years, so they knew her well.

We were pre-approved, and we still went through most of the horseshit you described. Our loan agent didn’t send the fucking paperwork to underwriting until three days before the closing date.

I’m starting another Pit thread that may be of interest to you, incidentally.

My sole concern is that they expressly disavow any liability for failing to identify any defect, no matter how obvious or significant. In effect, they are little other than a “how to” walk thru of your house, and provide an out for buyers who wish to quelch a deal.

No kidding, so why did you give them yours? The last time I bought a piece of property, I shopped it with 4 different lenders to get the best customer service & rates.

I’ve also done two houses. The first one was kind of like being anally probed by a moose with elephantitis, the second wasn’t so bad (except for asshole sellers who hid a bunch of flaws and TOOK THE CURTAINS!).

We went with one of BoA’s no closing fee loans. Totally smooth process. First mortgage guy could only be described as incompetent if you’re feeling exceptionally generous. You can even find a thread in the Pit about 4 years back if you’re interested.

-Joe

It sounds like you do have to shop for a decent lender, then. It’s probably one of those things that you don’t know how bad they’ll be until you get in so deep it’s more trouble to get out than keep going with them, though. It really sucks that people have to pay tens of thousands of dollars in interest to people who are grossly incompetent, though.

When I dealt with BoA I had two guys I dealt with. The first took care of all the initial stuff, quoting rates, paperwork, and the like. Then he passed us off to the second guy.

No problems. Nothing. They were able to tell me exactly what I would have to bring to closing something like a week ahead of time.

My first loan (BanCorp South)? The guy was able to give me an amount ONE HOUR ahead of my closing. I’m not taking “to-the-penny so I can carry a check around with me” amounts, I’m talking even a ballpark amount.

-Joe

My SIL and BIL found out *the day before *closing they needed to come up with an additional $10,000 for closing costs.

Much teeth-gnashing ensued, they found another lender (the seller was highly motivated and gave them an extension) and they did close on the house without needing the extra cash.

I highly urge you call your lender DAILY to make sure everything is on schedule. Talk to supervisors if necessary.