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Author: brucedoe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Something Funny Going On Date: 9/26/2012 3:26 PM
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My wife and I are scheduled to move into a continuing care facility in about 6 wks. For some weeks, we have been trying to get a $250,000 loan from BB&T on our house appraised at $310,000 by their appraiser. We have provided BB&T with proof of assets of $900,000, but actually, FWIW, we have about a couple hundred thousand more, depending on the whims of the stock markets. Supplying the information they need was like Chinese water torture as many times we supplied the one last bit of information only to be asked for more in a few days). At first we were quoted a loan at 3% on a 7 yr loan, but then, for some reason, they said we would have to pay something like some points because it didn't look as if our monthly income covered the payment enough. I said OK. Today I had a call saying that our loan was REJECTED because we didn't have enough monthly income! My wife gets Social Security and I get 60% of a Federal annuity. The fact that we withdraw some money from our assets when we need to seem not to matter to them.

Now our agent is pursuing a longer term loan or a $250,000 line of credit at prime plus 0.5% or 3.7% (Currently we own the home free and clear. We also own a summer home free and clear and two autos free and clear.). All this seems like bate and switch to me. Our agent says it would be the same no matter what bank we went with.

In the past, I have considered paying cash for the continuing care facility (which is fully refundable to our heirs). I decided against it because we would have to take a lot of money from our IRAs and 401k's and pay a lot of tax on it. But it wouldn't surprise me if we were rejected on the line of credit or a longer loan too, the way things have gone.

They say our credit ratings are not a problem. Equifax rates me at 86%, Experian at 94%, and TransUnion at 77%. Among the things that lower my score, that sounds good to me, is "too many inquiries in the last 12 months," "Time since most recent account opening is too short," and "Length of time accounts have been established." These are something beyond my control. One last one "Too many accounts with balances" is within my control, but I'm unsure what they are talking about as I pay off my credit card every month and I pay ahead to our country club. My wife's ratings are somewhat lower at 76%, 68%, 68%. This is because my wife had a stroke and I have had trouble adjusting to paying her accounts as well as mine so some have been paid late, but I am told her ratings are not the problem.

Does all this sound like on the up and up to you pros?

brucedoe
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Author: TwoCybers Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116673 of 121585
Subject: Re: Something Funny Going On Date: 9/26/2012 7:46 PM
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Bruce big banks have systems and rules. The folks in the branch can't hardly turn off the lights or replace a dead light bulb without permission or following a prescribed procedure. The solution is very simple. Go elsewhere - the amount of money you need is trivial to a bank, but a community bank wants your business and the people who can make the decisions (or exceptions to rules) are generally either in the office or another close by.

A friend of mine wanted to buy a house. They had the loan all approved and just before the closing for unknown reasons the bank decided on getting a second inspection. That inspector said the roof was defective and leaking. The bank said they would not issue the loan until after the roof was fixed. Well that is all well and good, but the seller was destitute and had lowered the price to cover the cost of roof repair - agreed to by seller. The house with bad roof appraised at $450K. The sale price was under $300K and the mortgage was to be for $290K. The bank would not budge. My friend walked across the street to another bank, explained the entire deal with various engineering and inspection reports included. He get a loan from the second bank for 300K.

There is no point in telling the BB&T folks you are dealing with - they undoubtedly want to help, they just don't have the authority.

About 30 months ago, I switched from a traditional, large regional bank (similar to BB&T). I got my checking account at Ally Bank. I have an Money Market account at a one branch community bank. Use Ally which is free and rebates all my ATM charges at any ATM in the country for bill payments. Use the local bank for safety deposit box, and to keep my Emergency Cash account. They pay a decent rate of interest - well lets say higher than my brokerage firm or Ally.

Gordon
Atlanta

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Author: bookie71 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116674 of 121585
Subject: Re: Something Funny Going On Date: 9/26/2012 8:17 PM
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Canyou join a credit union? They are much easier to deal with than the big city banks.

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Author: CABob Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116675 of 121585
Subject: Re: Something Funny Going On Date: 9/26/2012 11:54 PM
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For some reason many lending institutions primarly look at income and ignore assets or net worth. For the last home loan I got I had to show that I was taking withdrawals from an IRA in a sufficient amount to cover the mortgage payment even though I could show that the IRA had enough in it to buy the home twice or more. And that was at a credit union.

Bob

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116676 of 121585
Subject: Re: Something Funny Going On Date: 9/27/2012 10:07 AM
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For some reason many lending institutions primarly look at income and ignore assets or net worth.

Earned income is more reliable than assets that can be spent. Applying the same logic to distributions from IRAs doesn't make alot of sense.

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Author: billjam Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116678 of 121585
Subject: Re: Something Funny Going On Date: 9/27/2012 10:30 AM
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Sound pretty typical for a large bank. You could be a multi-millionaire with your assets in tax sheltered accounts and living frugally on social security. The bank would only look at your income. They don't care about your assets. Makes it pretty tough for retirees. Do you have a locally owned bank or saving and loan in the area? They should be easier to deal with.

I've dealt with the one for decades. I know everyone in the place. Sure makes it easier when I want to borrow. They still use their brains as well as numerical guidelines when making loans. In addition, they hold their real estate loans instead of selling them like most banks do. Sure thankful for that the last few years when some homeowners didn't even know who they owed their mortgage to.

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Author: brucedoe Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 116718 of 121585
Subject: Re: Something Funny Going On Date: 9/29/2012 10:58 AM
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Thanks everyone.

Yes we do belong to a credit union, Pentagon Federal. I probably should have started with PenFed, but our agent that would handle the home sale said he used BB&T. We have three checking accounts there so I thought it was all right.

Now BB&T has offered us a $150,000 line of credit. I told them not to bother. They said it would be no bother and we don't pay any interest if we don't draw upon it. Guess that is all right. This is in a different office from loans. They call it commercial.

My decision for now is to stay in our home and hire in-home care if we need it. I'm exhausted. Our family goes along with this. This requires us to extricate ourselves from our contract with the continuing care facility. The lady we deal with said she thought it would not be much of a problem except we would not get our money back that we have paid in so far until the apartment is resold. She will check with legal to see if that is correct.

brucedoe

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