Banks Behaving Badly (continued)

See last post. First they made the claim that they had already offered to reduce my total points from 4.125 to 3.5, which wasn’t true. They then offered to reduce the points to 3.625. Even though this was not as good as what they were offering on their web site, I obviously wasn’t going to get anything better, so I took it.

The next day I was told they had relocked at 3.5 points. They were apparently so disorganized that they cost themselves .125 points. I received the new rate lock agreements for loans at 3.25% and 3.5 origination points, which I promptly signed and returned. As usual, they didn’t bother to correct any of the dates on the paperwork they gave me. In addition, the loan amounts still appeared to be wrong, but they were at least close to what I believed the correct amounts would ultimately be. About two weeks later, my loan originator again sent me the same rate lock agreements but changed the points to 3.625. I complained; they told me they would honor the original agreement of 3.5 points that was already signed.

It’s important to understand at this point, now almost three months into this refinance, that I still did not know how much money I was going to have to bring to settlement. I told them I needed to know the amount a few days ahead of time because it takes time to move money from one account to another. I received the following response:

RESPA laws require that we have the final numbers to you the day before settlement. Unfortunately we will not be able to accommodate your request to have the package for review 3 days in advance. You’ll need to make other arrangements for bringing funds to the table.

As you can imagine, I was pretty upset about this, but at least they were telling me that they were bound by law to send me the salient information at least 24 hours before settlement. I told them that I would hold them to the loan amounts specified in the rate lock agreement.

The loan amounts given were:

[address and loans removed]

3.25% @ 3.5 points (includes origination fee)

This is what I will hold you to. These loans should cover most or all
of the closing costs.

They responded:

We’re more than happy, if not legally obligated, to honor the rate and points on your signed lock-in agreement.

I should have followed up on this response since the amount of the loans was not specifically addressed. However, given that this was an immediate and direct response to the very clear email above, I felt that they had confirmed (and stated that there were legally bound by) the amount of the loans we had agreed to in writing. So I was satisfied.

On a side note, a few days before this exchange was going on, NASA FCU suddenly started hounding me for further paperwork: verification of employment, PUD documents, and questions about previous loan applications. They ignored me for weeks and then, with less than two weeks before settlement, they suddenly started demanding paperwork. And it wasn’t easy to get. The homeowners’ association wanted to charge me for some of the electronic documents. After an uncertain delay, and a nasty email from me to the HOA, this was resolved.

The day before settlement, I asked NASA FCU to send me the closing paperwork. As they noted in the quote above, the law requires disclosure of the HUD-1 at least a day in advance. As usual, they ignored the law. The next day I talked to my loan originator. He refused to send me the closing paperwork and told me I had to contact the title company (actually my settlement attorney) to get a copy. I did, however they had only received what they needed from NASA FCU the night before, and thus could only send me preliminary versions of the HUD-1. I never did see the rest of the paperwork before settlement.

The attorney’s office sent the HUD-1 estimate. The loan amounts had changed. In fact, I was expecting to go to settlement with little or no money. Instead, I had to come up with about $10,000.00. Fearing something like this might happen, I made sure I had extra money in my checking account; it was enough to cover the extra closing costs. If I had not let that money build up in my checking account, I would not have been able to close. It was due only to NASA FCU’s repeated incompetence that I had the foresight to make sure I had far more funds available than they told me I would need. Needless to say, a lot of angry emails between NASA FCU went back and forth. They, of course, denied any wrong doing. I went to settlement without ever seeing the final HUD-1 or any of the rest of the documents, some of which had errors. In fact, I made them fix at least one document at settlement. The preliminary HUD-1 I had been given was not identical to the one I was given at settlement; they increased the amount I owed for the appraisal. To this day, I have never received the final HUD-1 for either property.

In addition to changing the loan amounts on the day of settlement, they also charged me an extra $285 origination fee on each loan. This was not disclosed anywhere. It was not in the GFE. It was not in the rate lock agreement. It simply materialized at settlement. Also, the extra $100 dollars I was charged for each appraisal was not part of the original charge. About two months after the initial appraisal, NASA FCU ordered a rent schedule. The appraisals specifically stated that the income approach was not used, which means the appraiser did not think the properties should be valued based on rent (which is how I would have done it). So why did I have to pay for rent schedules? I’ll never know. My mom’s theory is that NASA FCU was hoping to increase the loan amounts (which would increase the origination fees they collect) by using the income approach. This would help explain why they refused to tell me the correct amount of the loans. But it’s hard to know for sure without seeing written, incriminating evidence.

A few days after settlement, I complained to the BBB. I figured I would simply be ignored, but it was relatively easy to do and not very time consuming. To my surprise, I was eventually contacted by someone at NASA FCU by phone. But he was completely useless; he denied any wrong doing. Then I sent a packet of information to the NCUA, which regulates credit unions. I am still waiting for their response.

In the mean time they are still screwing up important paperwork. They sold my loans to USBank. There were delays in receiving my initial mortgage statements because my address was wrong.

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