The WORST Mortgage EVER!!

The WORST Mortgage Experience Ever? I have been doing this Mortgage stuff for quite some time now. I have seen some really messed up mortgagesÉhell, even I have had a brutal Mortgage experience. Mine was more of an ÒEnglish Second LanguageÓ thing Ð quite frankly, I didnÕt have the time to teach English, and explain Canadian Mortgage Practices, to my Scotiabank Underwriter. It was more painful than slamming my fingers in a doorÉand possibly even worse than carrying a Hide-A-Bed Couch up the stairs! If you read my previous blog about moving Ð you would understand the reference! To be clearÉher first language was definitely not English. But it was bad. ÒHow bad was itÓ, you ask? It was so BAD that I kept pushing the number Ò1Ó on my dial pad to get someone who spoke EnglishÉwhile she was talking! DonÕt get all excited now and think I am racist or prejudicedÉthe simple fact is that I am from CANADAÉspecifically WESTERN CANADA. I speak 2 languages, English and Bad English. Mortgages are complex enough Ð mix in an inexperienced individual only adds to the already difficult process. Add to that a person who can only piece together fragments of ÒBroken EnglishÓÉand you have a recipe for a complete and utter disaster. ItÕs unavoidable. Good times. I sent out an email a few weeks ago to a bunch of people I know and asked them for their help. I wanted to hear of any Mortgage Horror Stories they had experienced or had heard about. It took some time to read through the emails I received, and let me just say, ÒWOW!Ó There were a few doozies! None to do with us as the culprit mind you! The one that I personally found to be the most compelling was one that happens way too often. It has to do with ÒMortgage SpecialistsÓ employed by BIG BANKS. ItÕs irrelevant to mention it was a CIBC branchÉbut hey look Ð I did it anyway! The sad truth is Ð this practice occurs at all of the Big Banks! It comes down to ignoranceÉno, thatÕs not fairÉwhatÕs the word I am looking forÉnot ÒignoranceÓ per sayÉrather the more appropriate term I would suggest would be INCOMPETENCE! Yeah, that about sums it up. Enjoy the read. Mr. and Mrs. First Time Home BuyerÉthe Newly Weds! This story surrounds a poor fellow and his new wife that were pre-approved to buy a new home from their local bank branch. The very young, about 20 years of age or so as the client puts it, but very polite loan officer sent them on their way with an approval for around the $300k mark Ð after a short get together in her office. I forgot to mention Ð this took place back in the ÒBidding WarÓ Days in 2007 when the market was really hoppingÉin REGINA, SK. Here, in point form is what happened: Ð Pre-approval with local branch (with little Ms. Mortgage Specialist): Approximately $300k Ð House hunting for 2 Ð 3 weeks Ð Found several houses they loved Ð Put in multiple offers (even with bids above asking price) and none of them were accepted. The Real Estate Agent told them it was because they kept putting in ÒConditions of FinanceÓ. The ALL POWERFUL AND ALL EDUCATED Real Estate Agent (Éummm, in case you missed it that there is sarcasm) convinced the young couple to submit their next offer above asking price with NO ConditionsÉNo Home Inspection, No Gas Line Locate, No FINANCING Conditions, etc. Ð SoÉthey did just that. They found a house listed for $235k and at their Real Estate AgentÕs advice, and the comfort of knowing they were Pre-approved at their Trust Worthy BankÉthey put in an offer for $280,000.00 with No Conditions. Ð Their offer was accepted!! DUH! Ð A large deposit was put down on the home. Ð Happy to have finally found a home and have their offer accepted, they went back to local branch to see the loan officer. Ð WouldnÕt you know itÉthe young fresh faced gal was goneÉno longer working at the Bank. Ð No Problem! The clients were simply introduced to a new loan officer! Ð New Loan officer looked but couldnÕt find the Pre-ApprovalÉso took a new applicationÉa formality they were told. Ð DENIED! NO MORTGAGE FOR YOU! (Guess they shouldnÕt have asked for any BreadÉhahaha Ð good old Seinfeld referencesÉthey never get old!) Ð WHY you ask? Well, it turns out that the husband had an Òover draftÓ on his Account with a small un-paid balance (about $200.00 according to the client) from when he was a Student attending university in Saskatoon in 2003. It had evolved from simply being an over draft and was turned in to an automatic DEFAULTED LOAN, and was sent to a 3rd party Collection Agency for recovery! It was never recovered Ð as he had never been made aware of it he says. Before he left the Bank that day, he paid it off. Ð But thatÕs not allÉthe original loan officer (you remember herÉthe 20 year old Mortgage Specialist with YEARS of Home ownership under her belt and plenty of financial experienceÉ.you guessed it, more sarcasm) she failed to SEE this as she apparently looked at an old credit report that was on file rather than pulling a current one! GASP! Ð ÒThe Hits Just Keep On ComingÓÉthe clients had borrowed their down payment from their parents Ð and had used most of it for the deposit. Ð After leaving the bank, they immediately contacted their most trusted Real Estate Agent to get him to stop the deal. He said they would Òforfeit their deposit and could be taken to court for failing to hold up their purchase agreement and for causing the SellerÕs unnecessary hardship for taking their home off the market! Ò- Unless they could come up with some way to get new financing arrangements. FYIÉOnly 1 day had lapsed (a Friday at that)Éimagine the hardship of those poor sellerÕs in the midst of a HOT Market with Multiple Offers over the listing price coming in on every home on the marketÉmy heart breaks for them. Ð Moving on, the Real Estate Agent scolded Mr. and Mrs. Newlywed for Òwasting his time and for coming to him with a FAKE approval.Ó Ð You think it canÕt get any worse donÕt youÉwell it does Ð they told the Agent they were not happy being scolded like children and they were going to use someone elseÉÓNot So FAST!Ó Ð they had signed a BuyerÕs agreementÉthey were over a barrel Ð they were obligated to complete the sale with him. Ð The clients, already having borrowed money from their parents, told them the storyÉthey had no other options; they asked their parents for their help. LUCKILY, there is a happy ending Ð the parents had worked with me (Jason) before I opened FOCUS and they called me on my cell phone to see what I could do, if anything. To answer your question, ÒYESÓ, I saved the day. It was the Saturday of the Labour Day weekend when I took the call Ð for those of you who know meÉyou would be right to assume I was sitting in my boat-fishingÉand enjoying a cold and frosty beverage (once again, I will say no more Ð lest I incriminate myself!). I spoke to the parents and listened to the story. It sounded fishy to me (yes Ð I admit it Ð that poorly placed pun was definitely intended!). I made arrangements to meet with the clients the following morning. On the following Sunday, I got up Ð drove back to the city (in my hot rod Plymouth Breeze!!) and I met with the kids and their parents. Well of course they came to FOCUS!! Did you really think it would have ended any other way? Come onÉitÕs no secret Ð we are the best there is at what we do! In the end, I managed to complete the transaction for them. It was really quite simple. They even got a better rate than their Bank had pre-approved them for! So, how did I do it? Like I said, it was really quite simple. First, I know the Mortgage Rules. Secondly, I know what my lenders will and wonÕt look at. Third, I knew I could set up a contingency for the Parents to buy the house as a 2nd home if necessary. Lastly, and perhaps most important, I used a little thing I like to refer to as ÒCOMMON SENSEÓ. It was painfully obvious that Mr. Newlyweds past transgression was an isolated event. I simply explained it to the lender Ð and the rest is history. ThatÕs all for today! Enjoy the weekend! Jason Dornstauder AMP Accredited Mortgage Professional Have you got a Horror Story you would like to share? Email it to [email protected]