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I received a call from my loan officer tonight.  The underwriters have a few “issues” with my file.  They don’t like my CPA letter that states I’ve been self employed for at least the last 2 years because it does not call out the company name specifically that I put on the loan app.  I have several companies, and have never really gave it much particular thought which one I use on the loan apps.  As long as I use one that I’ve been running for more than 2 years I didn’t think it mattered.  I like to keep my CPA letters rather generic so they can be re-used in many different loan scenarios.

Well the underwriters want a new CPA letter that says that I’ve been running the particular company I’m using.  My CPA doesn’t turn things around lightning quick, and they charge $250 each time I need a CPA letter, so I told the loan officer that I wouldn’t be getting another letter.  So we brainstormed how I could prove that I’m actually self employed by this company.   I had the idea of providing the articles of incorporation.  So I dig those out and notice that when we formed it, we named my husband as the sole member in this particular company.  Ouch!

So I put a call in to my loan officer and I’ll find out how we can resolve this in the morning.  Hopefully he slightly misdiagnosed exactly what the underwriters have a problem with and we can solve it another way.  All I’m claiming on my app is that I’m self employed.  I don’t think this is quite the same as claiming I own the company.  So maybe we’ll be able to get away with saying that by way of marriage by default I’m also owner of the company, or my husband can vouch for the fact that I do run the company.  Guess I’ll find out tomorrow.  Since we’re closing on Monday, something creative will need to be thought of quick.

In all the loans I’ve done, I’ve never been asked about this before.  I’ve used this company many times before.  I was thinking I could resubmit the app using a different company, but after looking through all of our companies, it turns out I am not the 100% owner in any of them that are more than 2 years old.  Put that on the to-do list.  We could try a different lender also.  We’re already 4 credit pulls into this, why stop now?

I had a few more exchanges with the builder’s lender and title company today and wanted to report a couple things of interest.  Title called today to set my appointment for signing the loan docs.  The appointment is on Monday just after the walk-through of the house where we develop the punchlist of final things that need to be corrected.  I’ve always been fascinated by the fact that they make you sign off on the loan before the house is actually complete.  One time the builder took 3 more months to finish the punch list after we closed.  And the lender had the nerve to come after me because we hadn’t moved into our primary yet.  Anyone want to live in a house where the construction trades start working on it at 5:00 am and they keep coming unannounced for 3 months?

So we sign docs on Monday and the loan officer submitted initial papers to the lender this afternoon.  That gives everyone 3 business days to do the loan.  I’ve seen no good faith estimate and have no idea if the type of program I’ve asked for is what they’re lining up for me.  I hope my loan officer took meticulous notes because it’s looking like we have one chance to get it right.

Title was sure to let me know that if funds are needed at close I need to bring a cashier’s check.  However, she could not guarantee that I would get to see the HUD-1 prior to close, in order to see how many funds I need to bring.  I already know I won’t need to bring any money, but if I did how would I?  She was following her phone script and that question threw her off. 

In any case I told her that I would be needing the HUD-1 prior to close in order to review it for errors, and considering we’ll be doing the walk-through just before the closing appt, I won’t have access to email that comes in the 11th hour.  They either need to get it to me Friday or I’ll have to reschedule the close so I have time to review it.  I have yet to review any HUD-1 created in this Arizona frenzy that didn’t have errors.  The last time I needed an error corrected it took over a week to re-draw docs.  If I don’t close by the 29th I lose the $75k incentive + closing costs.

Title also volunteered the information that they are closing out their fiscal year and are super swamped.  That’s why she doesn’t think the HUD-1 will be created before the appointment.  It may actually be created during the appointment.  And, all of the escrow agents are booked so they are bringing in temporary signers to do the closings.  I’ve had it happen before when I ask a question during closing and the signer throws up her hands saying “This isn’t my file, I don’t know anything about it.  Sign here.”

Working with a builder’s in house lending is a battlefield.  Make no mistake about it.  You have to know more than them at all times and watch every move they make.  They may well be highly competent (although very good at disguising this at times) but the issue is they are too busy.  The large publicly traded builders are large companies.  They keep an eye on the bottom line at all times, and as most of us who’ve been in the corporate world know, this often means that staffing is tight.  Fewer people are doing the work.  They’re working long hours and are creating shortcuts to get the job done wherever they can.  What does this translate into for me and you?  Sloppy work and mistakes.

Within the last 7 days, my friendly loan officer has pulled my credit 3 times. 

1. They pulled it once immediately after signing the contract
2. Then they changed loan officers on my file, so the new guy pulled it again
3. He shopped for some loan programs, then pulled it again last night just before submitting my file to underwriting.  His loan software that he plugs my numbers into requires a credit pull.

He tells me the lender we go with will need to pull it themselves again.  So there will be 4 credit pulls on this loan.  There may be more because the lender he is choosing will have to approve of a special “exception” he’s requesting.  In the event they don’t approve it, we’ll have to go to another lender resulting in another credit pull.

What really burns me is that I told the first guy very specifically that I was NOT authorizing him to pull my credit just yet.  I would be telling him all three of my scores, we would shop the loans under that assumption, and at the last minute when he absolutely had to, he could pull the credit.  That guy completely ignored my request and now the new guy did too.

Today when I learned about the 3rd credit pull within the loan officer’s office, I told him that was unacceptable.  Once for him and once for the lender is acceptable, but 3 for him is not.  I told him that after this is done I would be asking him to contact the 3 credit bureaus to have those unauthorized pulls removed.  He stuttered and bumbled a bit and said that he would need to go back through his records to confirm whether or not he was the one that did the credit pulls, because I could be having anyone else pull my credit right now simultaneously and I’m just blaming it on him.  What an idiot.

Let’s put this all into context.  Why do I care about this?  Every month I’m either buying of refinancing something.  If I have 4 credit pulls per transaction, this could be 48 per year, just on real estate alone.  I realize that credit pulls only affect the makeup of your score by a small percentage - I believe 15% of your score is weighted on this.  I also realize that multiple pulls by mortgage companies within a short timeframe (I believe it’s 10 or 14 days) are supposed to be viewed or counted as one.  Supposedly you are not penalized.

Not true!  More and more the lenders are interrogating every credit pull they see on my report and I’ve been having to write letters of explanation about who is pulling my credit and why.  This means I’m expected to know what company pulls my credit on what date, for an entire prior 12 month period.  This is impossible.  I cannot remember nor do I keep track of this.  Plus the cryptic codes on the credit report don’t give me much hint as to who did the pulling.  These lenders are creating the monster and they’re putting the burden of explaining their behavior back on us.  Rediculous to say the least!

OK, my rant’s over.  Watch your back.

The results of the real estate carnival have been posted at The Real Estate Tomato.  Check it out.

A friend of mine bought a house near what will be our new primary over the weekend. He got $75k off the sales price like we did.  As with any real estate purchase, you have to confirm your numbers.  Just because they’re taking money off, it’s not necessarily a good deal. 

The sales person at the model had 2 homes that had fallen out of escrow and were back on the market.  Even though they were offering huge incentives on both, one was a deal and one wasn’t.  We asked her to pull the sales contracts for the last several homes like these that had closed.  Low and behold her super-discounted sales price on the one home was still higher than any recent contract she could produce for us.  The home she wanted us to take was $280k after all discounts.  Other homes of this model recently closed for $263k and $271k. 

“But the home for $280k is a model” she pleaded.  So what!  Sure it has extra bells and whistles, but many people don’t care about that, and appraisers certainly don’t give you credit for the African wallpaper on the walls, the designer paint colors in each room, the cute curtains that would match only the model furniture that is now gone.  When we tried to explain our strategy of wanting instant equity so that we could re-fi into a more favorable mortgage, it was like we were speaking a different language.  According to the sales person, we had tens of thousands of instant equity because they were taking money off.

Now there were people flooding that sales office all day.  Word was out that huge incentives were being offered on any contracts that had been coming back over the last couple of weeks, and Sept. 30 is also the end of the builder’s fiscal year, so incentive is the operative word!  We knew someone would probably buy that house that day.  Finally she told us to put in an offer and she’d see if it would get accepted by the boss.  So my friend told her he would pay $250k.  After arguing with us some about the low-ball offer, she agreed to call the boss.  She said she knew it wouldn’t be accepted.  We razzed her a little about how you can solicit the answer you’re looking for by the way you ask the question.  She could tell her boss that she had a rediculous offer and maybe he would agree, or she could tell him that she received an offer that she’d like to accept.  She understood what we meant and even poked fun at a TV commercial that dramatized the exact pursuasion technique we were talking about.

So she gets the boss on the phone and what does she say?  Something like “I have this low ball offer and I’ve already told them no but they made me call and ask you just to confirm.”  The phone call lasted maybe 10 seconds and of course the answer was no.

We spent about 5 hours in that office that day and I could go on and on with examples of craziness that we witnessed.  At the end of the day, we all agreed that the builder is corporate America, interested in one thing only, and that is money.  The fiscal year end means revenue targets must be hit and stockholders must be happy.  They were holding out for the greater fool.