My readers know that what you get here is some insight on everyday matters as a result of my “being there, did it, and this is what happened.” Anecdotal evidence yes, but that’s often better and more instructive than expert advice from expensive professionals with a conflict of interest (they’re selling services or a book.)
Having a mortgage on my house, a 30 year ARM (Adjustable Rate Mortgage), I decided to refinance into a fixed, and get enough cash to pay off my credit cards, which are kinda maxed out at the moment plus a bit of cash besides. The Obama administration seems to want us to do that if we can, and they have encouraged, indeed ordered, the banks to loan out the money they got when the government bailed them out under the TARP (Troubled Asset Relief Program) of 2008, and of course radio thunders the ads at us constantly, and the phone assails me with calls from brokers to get my business. So let’s see how it worked out for me with these providers:
1. First I tried Chase Bank, who hold my current mortgage. They would surely want to let me refinance, I’ve been a steady and never-late payer on my loan for 12 years now. This is what happened:
They checked my credit rating. Mid-range, ok. They looked at my paperwork, income, all that stuff. THEN they asked “Have you had your house on the market within the last 6 months?” Yes, I said, certainly. Withdrew it only last week. Sorry was their answer, cannot consider you for a refinance because of that. End of discussion.
2. I then tried Quicken Loans, who declare they are the best, lowest rates, etc. etc. A guy in Michigan, Reed Wilkin, handled my request. Very enthusiastic and excitable fellow. if you owned a vacuum cleaner company, you’d want him as your frontline door-to-door salesman. Or bibles. He took my information. He checked my credit score. He said “no problem”. I told him what Chase said. He said Oh dear, we can’t do it then, and hung up. Then he called me back, said his boss cleared it so it didn’t bother him anymore. Then he said was I living elsewhere as I had a different mailing address? I said that I keep an office at Oakwood where I am the Notary Public. He said nevertheless, in his view my house was my second home, and he’d go to prison if he was caught lying. I persevered. Then he said that my wife had to commute too far to work. I said 5.3 miles is too far? He finally said sorry, you don’t fulfill our requirements, we cannot consider a loan. End of discussion.
2. Then I tried LoanDepot. Very calm, business-like guy called David on the phone, and they had an office locally. I faxed over all the paperwork. This, I figured, is going to happen. We agreed on the terms. I expected a commitment. He sent an appraiser. Fine, nothing to worry about there, I have remodeled the house. The appraiser came, personable fellow named Sean Copeland. He took a few measurements and left. His report said that I had a single family residence, and the lower unit was breaking the zoning law, because there was a stove top cooker in it. He said to get a loan, I should cap off the gas, and relocate the steps now outside, to inside. What? I pointed out to LoanDepot that the lower space did not make it a duplex. One electric meter, one water meter, one entrance. He laughed at me, and said sorry, we cannot do a refinance for you. I checked the internet, and came up with this explanation of what is a duplex, and what is a single family residence. This is what an expert appraiser says, that there is such a thing as a smaller add-on unit, an ADU, often referred to as, among other things, an in-law, granny flat, and mother-in-law suite. With cooking facilities. Read about it here. And here. Sr. banker John Zimmerman ignored the proof. End of discussion.
3. My accountant had a great suggestion. He said why don’t you go to your local Credit Union? The banks hate them, because they are faster and usually less expensive than the big banks. So I crossed over the road to First Entertainment Credit Union, very handy. Spoke to a welcoming agent in their loan department named Ken Nakanishi. He would be my friend, I could see. He suggested I get a line of credit on my house, much more simple than a refi, and would allow me to consolidate my credit card debt. Great I said, now I feel I’m getting somewhere. A couple of days later he called. Sorry, he said, but you have a negative amortization loan at present with Chase. We cannot grant you a line of credit. But, he said, if you take out a refi with a fixed payment with us, then you could even do both. Hooray was my answer. A few days later he called, and said that when I paid off my credit cards, I’d have to close my Gold American Express card, which I’ve had for 39 years. Are you nuts, I said? No way! 2 more days. Then he called again, and said they were denying me my loan, as I had 2 units in a house zoned for single family occupancy! Nice knowing you, I said, and printed out and sent them the article so they could read it and perhaps educate their lending and banking staff on the realities, or I prefer to believe that they knew already, and hoodwinked me.
So I got nowhere. I am convinced that this so-called lending spree is a farce, humbug, and B/S, acted out by businessmen who don’t negotiate in good faith. Almost worse, they are time-wasters. Never mind money in the bank – at my age, I don’t have much time in the bank. And they caused me to use up about 4 weeks of it. So now I am just mad as hell, and I’m not going to take it any more.
What will I do now? Screw ’em, I’m just a short walk from the Hollywood Bowl, and I shall vacation-rent it out for a few days at a time, and sleep in my office at such times, and maybe say I have a duplex!