I believe that was the title of a movie in the late 90's with Jim Carrey. But I am not a movie buff so I stick to real estate.
These are harsh words to use, and maybe I should write: They are not telling the truth and / or coming clean with complete information. Who are we talking about? Banks in general ( I may have informed you of my issues with Wells Fargo before), but two banks specifically. Chase and Bank of the West. These are from clients personal experiences with these banks:
1. When the buyer approached Chase, he informed the bank the building was in litigation. The loan officer informed the buyer that they do not really care about litigation as long as it is not structural issues. And it is not. So buyer, who was already preapproved with this bank before he found this condo, moved forward with the process. All litigation documents and lawyers papers as well as HOA management papers, and information was given to the loan officer. The bank moved forward and requested an appraisal. The appraisal came in at value.
The underwriter at the bank refused to fund the loan. They simply said the underwriter cannot fund the loan as they "think" the appraisal is too high. The underwriter ( you cannot speak with) , nor the loan officer, gave a formal reason why this appraisal was not acceptable. Which is very interesting of course, as that is what appraisals are for: they determine market value for the lender. But they still ignored it. And since the buyer was willing to put more than 20% down, they (the bank) could have suggested to increase the down payment, but they didn't.
So we may conclude here that the bank lied to the buyer that Chase does loans on building in litigation and they apparently can simply claim the appraisal is no good. Funny though how that works. When the appraisal is much too low they usually do not reject the appraisal. The buyer was $1000 out of pocket for inspections and appraisal. I seriously question the integrity of this bank and its people when processing loan.
With Bank of the West, a similar thing took place. I personally spoke to the loan agent for 45 minutes making it clear the property was in litigation. The loan agent showed me a flyer clearly indicating they do non warrantable loans on property in litigation, "as long as it is not health and safety related". Which it is not.
So the buyer went through the wringer again (even having to respond to an employment gap of 30 days in 2011!!!!!!!). Since this is a strong buyer and he went easily through the preapproval process, they proceeded to the appraisal. I had shown them the previous appraisal already, so they were informed. The second appraisal came back at value, with a different appraiser.
Unfortunately for the buyer, the bank refused to fund. They claim there is not enough collateral? WHAT?
How can there not be enough collateral if the appraisal informs the bank there is. And furthermore, the building was going to get a serious face lift all paid for by the builder, at no cost to owners, so the collateral value would increase.
Again this bank refuses to fund. I spoke with the VP of lending for 30 minutes, and asked them why their process is so screwed up? The loan agent did not even look at the litigation documents or speak with the HOA lawyer about this ligation. Again here the buyer was willing to put more down, but the bank simply refused to asnwer.
So, as far as I am concerned, think twice or three time before you work with these banks. They have no integrity in my opinion and are not telling the truth up front and will basically do anyhting they want without having to explain.
Aren't we supposed to be able to trust banks? Don't they all advertise they are here to help? Where is that?
Antoine
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