Well, another interesting month here in the mortgage industry. I had a lead which I got through a internet marketing firm we work with, a refinance of a high priced property here in Pennsylvania. It was going to be a great loan, not only for the customer, but we stood to make a decent buck on it too! And then the proverbial crap hit the fan. But, one step at a time, let me fill you in.
My customer, a 70 year old Single woman bought her home for $297,000 back in November of 2005. Was given an interest only first mortgage and a line of credit second. There was no sort of pre-payment penalty on the loan but she really wanted to get out of the interest only & adjustable rate combo and consolidate a mountain of debt she had piled up since her purchase. According to the customer, she had contractors do a lot of work since her initial purchase. She said that she had a recent appraisal of $350,000. Ok, fine....let's do it.
We got the appraisal over but the mortgage company she had dealt with refused to put it in our name and for some reason the appraiser would not do another appraisal and put in our name. So, another one had to be done so we sent our independent appraisers out there. Small problem, the appraisal that was done that came in at $350,000 was a tad skewed. You see, the gentlemen had added an extra room/square footage/and acreage to the property that didn't exist when he did the appraisal to bring it in at the value. Not good.
Bigger problem though, our independent appraisers had trouble finding comps as it was a ranch in a higher end neighborhood. In fact, oddly enough, he was having a hard time finding comps to support a value of the purchase price she bought it at 10 months ago! He took even more time to make sure he dotted all the i's and crossed all the t's as he knew this lady had been screwed. He finally brought the appraisal in and it came in at $267,000 which is $30,000 less than she bought it for in a neighborhood that is by no means depreciating. He went the extra step to call the customer and explain what was going on. This guy has 25 years of experience and we've been doing business with him since our inception. Very reputable guy and this lady had been screwed.
Now she is stuck and guess who the bad guys are? Yep, me...us....our firm. We apparently were discrimatory towards her for whatever reason...and mislead her to what we could do for her. Instead of listening to what position she was in and that she may want to seek council to what her options are, I have a customer who is in a bad, bad, position and it breaks my heart. I was't even thinking of the lost commission, I was thinking of how this could be allowed to happen. I'm not naive, I know fraud comes in all forms and businesses, but geez oh man, justice needs to be served. Any thoughts or similiar experiences by the network.........?
This is a problem nationwide and your customer is just the first to get bitten by when you were involved. The way to get the customer back on even footing is to try the following:
Good luck
Ken Stampe HomeLoanDFW.com
I don't know what the laws are in your state, but here in Texas the borrower has a right to a copy of the appraisal. Your borrower needs a copy of the appraisal from Appraiser #1 who over valued her property. Then that Appraisal Company needs to be held legally liable for this. She might even have a copy of her appraisal #1 in her closing docs.
Your Firm is not the bad guys....It's the original Appraisal company and the first lender who are the bad guys. Shame on them !!!!
Appraisers are suppose to go through an approval process and background check before a lender will even hire them. Appraisal Company #1 is an approved Appraisal company by that Lender #1.
Next time you do a refi or a cash-out-refi have a reputable Appraiser do a Drive-By which usually only costs $50 - $100. That will save you a lot of time and $$$$.
The above is my response...It's been a long day...
That's a bad one Jason. Fortunately, I can't top it.
This client has rights. She needs to be put in contact with legal counsel. After the dust settles, she will likely remember who continued to try to guide her in the right direction.
I had another thought....
If this woman wants to get her home refinanced so bad then she should go back to the same lender who originated her Purchase Money interest only loan and her HELOC.
I wonder what would happen....things that make you go,"hmmmm..."
Your firm may not have gotten a loan out of the deal, but at least you are still in business Darlin...
Hang in, You did the right thing.
Jason,
I am a lender also and can appreciate this story. I have had similar experiences and what really bugs me about this kind of deal is the client. Just in your situation, they blame the wrong party. When you are an honest lender, you lose more than a few clients to dishonest ones. Sometimes I think people really want us to lie to them so they can go on with their "perception" of the situation. Fortunately, this does not happen often.
In the end we are the ones who can sleep at night, we are the ones with longevity and we are the ones who get referrals and get a chance to experience what a great feeling it is to truly help someone out. Chalk it up to experience.