Mortgage companies are irresponsible, plain and simple. They think nothing of playing games with people's finances and credit records.
Believe it or not, this is the SHORT version of the story. I've left out all our conflicts with C (more on that in a moment) last spring since they don't affect the refinance story directly.
To protect the far-less-than-innocent-but-capable-of-filing-defamation-suits-against-me mortgage companies involved, I will refer to them in the order they served (I use that term loosely) us as A, B, C, and D.
1) Late October, we got a notice from a fellow college alum offering a fantastic mortgage rate. We think about it but shelve the idea for the moment.
2) Early November, we get a notice from C saying that our escrow payments were larger than they should have been and that we have $X credit in escrow. Mind you, this was THEIR fault because for some reason they still can't calculate what the monthly amount should be. It fluctuates month to month. We pay whatever the bill says because our experience last spring taught us that they are absolutely dumb when it comes to receiving payments.
3) Late November, we get another notice from C saying that our total escrow is SMALLER than it should be and that we owe $X more. Once again, if that's the case, it's THEIR fault. (And, um, what happened to that credit?). We shut up and pay the bill...and dig up the old email from that college alum.
4) Early December, we've been in contact with the alum and gotten the new rate with D locked in, and we work our way through the reams of forms and statements and affidavits. Alum tells us it usually takes about 7-10 days to get to closing once the wheels are in motion.
5) Last Thursday--yes, late January--we finally hear from D's attorney. D has been trying to get our finances verified through credit reports and bank info as well as contact with our current mortgage lender, C, and our two former ones, A and B. But numerous mistakes have surfaced.
- The amount needed to pay off the house is $17K different depending on whether you ask A (who sold our account to B in 2001 and shouldn't be involved at all), B (who closed our account when we refinanced with C in 2003), or C.
- The name of the current lender is different depending on who you ask.
- The city has no record of our mortgage with B being cleared before the one with C went into effect.
6) Ten minutes later, another clerk calls me. Apparently the first one had never run into these things before and passed the case on to her. She asks me a bunch more questions and tells me that the mistakes all appear to be the doing of B, but she can't do much to right them because, as she is not the customer, both B and C are refusing to accept requests from her. She gives me a list of info she needs and asks me to call B and C for it and have it faxed directly to her.
6) I spend the rest of the afternoon on the phone running the gantlet of so-called customer service hotlines, eventually speaking to humans, and putting in search and report requests with B and C. I also call the city and get property record numbers looked up.
7) It's nearly 6:00, so I'm on my way out the door for book club when the phone rings again. I'm shocked it's the attorney's office again. So I tell the clerk everything I learned. She is just bowled over with the incompetence. It turns out the info C's rep gave me was not just wrong but irrelevant, and B's rep had not faxed the attorney anything I requested.
8) Friday. I get on the phone with C again. Of course I get a different rep this time who has no idea what I'm talking about. I spin my whole tale again and file a new request. Then I get B on the phone again. And I get a different rep there, too, repeat myself, and discover that the attorney didn't get the fax because yesterday's rep had sent it to the city records office instead of to the attorney as I asked. I file a new request and hold my breath, because now I'm told it will be 3-5 business days before they will get around to filling it.
9) Attorney's clerk calls me to check in. I report what I was told, and she's just about beside herself. First, she can hardly believe that, besides the fact B didn't send the documents where I told them to in the first place, they would have faxed the document to the city at all. The clerk said it's a well-known fact that NO LOCALITY accepts faxes of this document. They only take originals. My request would be received and immediately trashed. The clerk said any mortgage industry rep with basic training should have known that.
But it gets even better. When I told her it would be 3-5 days, she said that was fine for the legal filing, but it wouldn't do for closing because the rate lock expires after six weeks. If B didn't get on the ball by Monday, our nice tidy new rate would be history.
10) I call B yet again, run the hotline silliness, and request (from a third rep) not a formal report or a legal document but a simple letter stating that the loan had been satisfied back in 2003. I told her what the clerk said--it didn't even have to be typed on letterhead, even a handwritten note was fine as long as it had a company rep's signature. This time I was told it would be up to one full business day. I repeated that it MUST be faxed because of my deadline. The lovely rep just kept repeating her "one full business day" line.
It didn't occur to me until after I hung up that I should have started shouting and demanding a supervisor at this point. B and its reps had no right to claim a full day to do this. The fact that B screwed up by never filing the proper legal document six and a half years ago was the whole reason we were in this mess in the first place. They OWED us a quick fix.
11) I call the attorney's office and report. We schedule the closing for Monday and all cross our fingers that the fax arrives by "one full business day," which would be 11am Monday.
12) We show up Monday for our 1pm closing. The document has still not arrived. We proceed with the paperwork anyway in the hopes it will come before we leave. 30 minutes and lots of signatures later, it's not there.
So. It's Thursday again. I'm guessing those documents are not going to actually arrive, and our paperwork and new loan will not be valid, until every last second (or longer) of those "3-5 business days" has passed. That means we'll be waiting another day. That's just to find out whether it came...THEN we'll get notice the new rate is in place.
Sigh.
The craziest thing about all of this is, these egregious inconsistencies were all over our financial records, yet we had no way of knowing it. Not only did the old mortgages not show up on our credit reports as paid...they didn't show up on them AT ALL. It was not until the title search that two liens against the property surfaced, one for the original mortgage amount and one for the current amount. (We'd paid off about $17K before refinancing the first time; that's where the $17K discrepancy came from.) The effect was to more than DOUBLE our indebtedness, on paper. It just blows my mind that one (or in this case, two) irresponsible companies can fail to follow through with legal procedures (i.e. recording the deed satisfaction documents) and create all this trouble for someone. And yet we were completely unaware that we have been technically "underwater" for the past seven years because of those mistakes. Happily thinking we're in good financial health.
Here's the sad part. The attorney told me that this is very, very common. Mortgage companies were so bad about filing legals that at one point there was a law that levied a $200 fine for each incomplete filing--not much until you consider how many filings they deal with daily. But the penalty law is no longer valid, so the companies have stopped following regulations again. The only way to force a lender to legally acknowledge that you owe them no money is to sue them and win. And what humble homeowner can afford to go up against a sprawling corporation?
Here's where I step on the pulpit.
Do yourself a favor. If you've ever completely paid off or refinanced your mortgage, call your county records office and make sure the certificate of satisfaction was recorded. (The call should be painless--the info is a matter of public record, and officials will give it to you with very little hassle.) If there's no record, call your former lender and demand it. Otherwise, you'll just never know. We found out the hard way--not every debt (valid or otherwise) shows up on your credit report.
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