Why am I the one that has to bring a certified or cashier's check to closing? Why am I the one who had to get his credit run about fifteen times, have his financial life analyzed under a microscope, and pay hundreds of dollars in application fees?I should be the one charging the banks, title companies, and other assorted nincompoops at this point. Absent a lightning strike, I am supposed to close on my first house this afternoon, at 1:00 p.m. Throughout this whole process, however, it has been nothing but a comedy of errors on the part of those so called 'professionals' who do this all the time.FIRST, there was the loss of my earnest money from the selling relocation company. I wrote a check, got a receipt, and had the money accounted for on my purchase contract. But somehow, the sales addendum contract that the relocation company who is handling the seller's side of the equation, didn't account for the check on it, so 'poof', the contract they sent me was off by at least $2000. And of course, it was up to me, at my own time, to get that fixed.THEN, my savings and loan lender screwed up the loan application, crediting my earnest money the wrong, so instead of being a $2000 credit against the down payment, it was credited as something else (not exactly sure what), but the end result was that the bank's numbers indicated that I didn't have 15% down, so I wouldn't qualify for their no PMI/great rate program. Up went the interest rate, and on got tacked PMI, and yowza, watch my monthly payment jump by $250. And of course, it was up to me, at my own time, to get that fixed.NOW, just yesterday, I got the HUD settlement statement. If I thought the previous financing problems were comedic, this statement was absolutely tragic in that it bore absolutely no resemblence to reality. FIRST, the address of the property was listed wrong - the street address was right, but the city was listed wrong It makes a huge difference - a matter of THOUSANDS in local income taxes per year. And yes, it matters. My zip code is shared between my local-income-tax-free community and this high income tax one. I've heard horror stories from neighbors who have been sent income tax bills erroneously, and had to fight them, because some paperwork listed their address in the wrong tax district. AND, again my earnest money got screwed up - omitted entirely from the money credited to me as already paid (yet another $2000 'mistake' that I had to fix). AND, the seller is supposed to give me $1000 in lieu of making repairs. Well, instead of listing the $1000 as a credit payable to me by the seller, it was listed as a credit payable to the seller by me. Another $2000 snafu ($1000 loss in money due me, plus $1000 extra that I do not really owe), that I got to fix, at my own time. BUT WAIT, there's more! My lender doesn't escrow property insurance, so I paid the first year's premium and have a receipt and proof of insurance card to prove it. I even faxed that to the lender over a week ago, and the lender swears that it provided it to the title insurance company. Sure enough, on the settlement statement, there's a line for $765 for property insurance, that I have to bring to closing.It gets better. Out county auditor has a great internet site. On that site, you can get all sorts of things, like the property tax owed on a house, whether the taxes are paid on time, etc. Well, in my world, if you take the annual tax bill provided by the auditor and divide by twelve, you get the monthly amount needed to pay the property tax. Which IS escrowed by my lender. Of course, it would help if someone knew how to read or divide at the title company. The total annual tax was off by about $600 (on the low side, so there wasn't any chance that they simply estimated for any tax increases), and the amount that the seller had to pony up to cover the second half 2002 and the 2003 (through today) real estate taxes) was off by that much. PLUS, the amount that I was supposed to bring to escrow two months of taxes (standard around here) appeared to be created by a random number generator. It bore no resemblence to the auditor's description of the taxes OR the "off by $600" figure that afflicted the seller's portion. The escrowed amount was off by about $85 a month. All of this, of course, I had to fix, on my own time, while under the gun, with the clock ticking towards this afternoon's close.I don't know how many thousands of dollars of 'mistakes' that the banks, title companies, relocation companies, and various agents have made. Many of which, had I not caught and corrected, would have cost me thousands of dollars - money that I don't have and certainly don't owe! Instead of me paying them their fees at closing, I should present them a bill for "Auditing services rendered." I don't need this kind of stress. Going through the whole moving process is stressful enough, without having the so-called financial pros mess up virtually every number at virtually every turn, and potentially cost me thousands upon thousands of dollars, due to their errors.
I personally am boycotting mortgage lenders. I don't think I can buy a property without a title company, but the lenders aren't going to get my business.xtn
I personally am boycotting mortgage lenders. I don't think I can buy a property without a title company, but the lenders aren't going to get my business.Paying all cash, eh?
Paying all cash, eh? It does create a stir (and a quick call for an armored car) when someone shows up at the title company with the entire amount in cash. Debra
I personally am boycotting mortgage lenders. I don't think I can buy a property without a title company, but the lenders aren't going to get my business.Paying all cash, eh? I'll either pay all cash someday in the future if I can, find an alternative borrowing solution such as a 401K loan, owner financing, relative financing, or something. I don't know.There is one thing I do know. I won't use a regular mortgage lender. I don't care if I never move again, I won't do it. Like I said, they aren't going to get my business.Look, I'm not against them. By all means I hope they prosper with tons of business from other people. I am just personally refusing to use them.xtnPS - Relating to another thread: I did hire my own appraiser, he did work for me, and he did answer my questions.
babyfrog,I have a similar rant that I'm going to post when I'm finished...though my sitch isn't nearly as screwed up as yours. Wow. That takes the cake. -b-
"I'll either pay all cash someday in the future if I can, find an alternative borrowing solution such as a 401K loan, owner financing, relative financing, or something. I don't know."Still the "cheapest" money you'll ever get. Great post!
Hey johnmoni!Congrats on the 'versary! Those Gay Pride Balloons like FABULOUS on you! D
I guess I've been very lucky. I financed through a State of California program (5% down with that 5% paid by a no-interest, no-payment for 15 years second), and met a very good mortgage broker. He was able to direct me to an even better deal, and he did all the work of fixing the escrow companies' inevitable errors. (As an aside, why does an escrow company, holding a large amount of the buyer's money and getting interest on it, knowing they have things that are due in 30 days, wait until the last minute to do them?)Then I refinanced through eTrade. Let me tell you, that was the easiest and best experience I've ever had with a loan. I filled out the paperwork online, was called the next day with an approval contingent on appraisal, made an appointment with the appraiser--which he kept, within five minutes of agreed time--at 7:00 at night (so I could be there personally), was given a copy of the appraisal, was told my loan was approved, and all this took about a week. Another week later my old mortgage was paid and my payment dropped over $200/month. Closing costs were under $5000 on a $400,000 house. Admittedly, I paid 1.75 points, but I got a 5.25% fixed 30 year loan.A comment on "the cheapest mortgage you can get." I'm paying about 5.4% APR, including points and closing costs. If I put that money in the stock market, I can expect to get an average return over the next 30 years of 6% to 11% (especially if I reinvest the dividends). In my opinion, my mortgage is "cheaper" than paying cash.
"Closing costs were under $5000 on a $400,000 house. Admittedly, I paid 1.75 points, but I got a 5.25% fixed 30 year loan."You could get a 400K house w/a State of California program!?!? What program is this? I'm a Californian, young, looking to buy, and want to buy in a decent neighborhood (therefore around 400K), but feel like I'm saving myself OUT of a house because I'll never have a decent payment to dodge the Jumbo loans, or just otherwise bad lending deals.How do you do it? Can it be done? I make good money in income, but I just don't have 20% on a 400K house!
Don't blame you for boycotting lenders. However, you are losing the leverage that someone elses money can give you. I prefer to put up with the lender headaches (which are many), and instead own several properties with the same cash. To each his own. In an appreciating market I have seen friends become millionaires in a decade with this strategy, but in a falling market it can be devastating. Actually if you pay cash there is no reason you will be forced to pay for title insurance. The risk of course is that you will inherit a lien or a co-owner along with your property that the seller didn't disclose, and you will have no title insurance company available to sue for the problem. Abstracts are still done in some states, and have their own problems (lawyers). The only reason the title company handles deeds and paperwork is that they are covering their own backside. They aren't required. One good trick with title insurance is to buy a binder. This allows you to sell the property or refinance it within a few years (5 at many title companies) without buying title insurance again. You must do it in the intial transaction though, you can't buy it later. Few title companies will volunteer this information. I'll keep my 15 year loans (that I accelerate by paying bi-monthly) and keep buying flowers for my favorite loan processor and escrow agent. These are the two key people who do all the work in most real estate transactions and will save you when everything gets FUBAR. Carbonates
that I accelerate by paying bi-monthlyPaying 2 times per month does nothing to accelerate most mortgages.Paying 13 times per year does.Paying every 2 weeks is the same as paying 13 times per year.You really have to beware the "pay every two weeks and save" programs that you inevitably get mailed after getting a mortgage. Every one of those "great offers" that I've gotten has been a request to pay some company an extra ~$300 up front fee and $3-5/payment fee for something I could do for $0 extra by just sending in an extra payment once a year or an extra half-payment every 6 months.Every time I see one of those things it annoys me to see someone marketting (and apparently selling) this to some poor sucker who doesn't realize he could do the same thing for free.
How do you do it? Can it be done? [$400K house in CA]80/15/5 combo loans...80% * 400K = $320k == JUST under the jumbo line. :)15% * 400K = $60K == second mortgage (HELOC is good choice IMO for this)5% * 400K = $20K down.(Alternatively is 80/10/10; which will probably get you better rates on the 2nd and maybe the first. But of course coming up with $40K instead of $20K is going to be more difficult.)Of course you still have to look at whether you can afford the monthly payments, and I would suggest looking at after-tax costs, which means spending an hour playing with a mock tax-return to see how it impacts your taxes.So yes, it can be done.
paying bi-monthlytechnically though...this person is paying every two months. I suspect the poster meant "bi-weekly." -b-
Advice for any non-cash purchaser:Tell the title company (at the beginning) that it is your REQUIREMENT that you receive a copy of the HUD closing statement three days before the closing appointment, and that if they can't meet it, you will find a company that can. I have bought and sold 7 homes in Texas, and NEVER received a HUD statement that was completely correct initially. The last three homes were transacted with the above stipulation, with no resistance from the title company, and there was no problem getting things corrected before the appointment.The question remains: Why can't they get it right? I think the answer is that there is no penalty for getting it wrong, except word-of-mouth advertising among RE agents.
Tell the title company (at the beginning) that it is your REQUIREMENT that you receive a copy of the HUD closing statement three days before the closing appointment, and that if they can't meet it, you will find a company that can. This is absolutely not practical in my neck of the woods. The seller chooses the title company, so I couldn't have changed it if I tried.Second, my title company was absolutely great on the HUD statements. Everything was accurate.Third, it wasn't the title company's problems that I didn't get the HUD statement ahead of time - my lender didn't get the docs to them. -b-
Congratulations, Babyfrog. Your experience has just got to be one of the top prize winners. And, congratulations, too, on your attention to detail. You're right, if you hadn't caught all those errors it would have cost you plenty.I've noticed that more and more it is the customer who must make sure everything is in order, all the documents are completed properly, and the dollars be correct and be in the right column. Whether it's mortages, health care, or lawn care, we have to be prepared to take care of business ourselves.As one of the posters to this thread noted, there is no penalty to the persons making these errors. The penalty is paid by the customer. Unfortunately, stories like yours (though most not nearly so, uh, "complete") are quite commonplace. Once again, congrats on your attention to detail. Frazier3
We used our credit union for our last mortgage deal and will never go anywhere else again; the only screw-up was at the very end when the guy from the title company handling the closing was at our house when we were at his office! The worst experience we've had over the years was from using a mortgage broker. Actually, dealing with that company wasn't bad at all but the only good thing about the banker was the rate. Every person at every level I tried to deal with in 15 months was dumber than a post -- hence the refi. You just have to remember that stupid people are all over. As someone once said: Trust no one! You have to do your own homework and do their homework (and redo it and recheck it a second and third time).I hope you're now experiencing the Joys of Home Ownership!
The guy at my title company drove a Prowler (sp?), bright, shiny, yellow Prowler. It made me sick to give that guy more of my money when I was driving an Elantra (great car for lower middle class people like me).Our mortgage company also made big mistakes, but owning a home is better than I ever imagined.
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