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Are They Trying to Torture Us?

Okay, I confess up front this is a bit of a rant. And I’m sure there are logical explanations for what we ran into today…but they sure escape me at the moment.

Yesterday we bought a house that we’re going to remodel and make our primary residence. We’d been working for about a week with a mortgage specialist at a large, well-known bank on funding it. We thought we were pretty much done with arranging the financing.

Boy were we wrong!

First, the specialist called us bright and early and said “Oops, I misread the information on Barbara’s incentive comp program. We have to shrink the loan by a really big number. Sorry!”

Next, we find out all transactions within our accounts are going to be scrutinized by an underwriter who will become very suspicious if we, say, liquidate some investments in order to come up with the needed down payment. Apparently, you’re supposed to leave tons of cash lying around in your accounts, or your bed, or somewhere, just on the off chance you might decide to buy a house.

Then I get a frantic call that the investment account statements I’ve sent in are unacceptable. Turns out when I didn’t bother to keep “fluff” pages — you know, the “we love you to death, why don’t you invest more with us?” and “here are a bunch of pretty, colorful charts you’ll never read” and “here are a bunch of boilerplate footnotes that don’t specifically relate to your account and rarely change” pages — I was creating a major headache for myself.

I guess the underwriters don’t actually read the statements. They just check the lower right hand corner to see that all the pages in the report were provided. Or maybe they think Schwab, Vanguard et al put stuff on the other pages that subtracts value from what I provided (“to find your real account value, please subtract this number from the total shown on page 3”). The same thing happened with the 1099s, too.

Underwriters don’t like you moving into a house smaller than your current one, either. We had to write a letter explaining that our desire to be in smaller quarters now that our kids have left home isn’t a nefarious Communist plot to undermine the American way of life.

I guess maybe there’s a secret cabal involving realtors, mortgage lenders and the financial markets dedicated to ensuring we always trade up. On a more serious note, I’ll avoid pointing out that in a world where we redistribute money to old people and are facing rising energy prices it is rather silly to create disincentives for moving into smaller homes.

Actually, explaining why we wanted a smaller home was one of the least ridiculous explanations we had to provide.

I’ll grant them asking what was behind a modest-sized deposit made some sense. We might be drug lords or something, after all. Although, personally, I doubt drug lords are dumb enough to make big deposits so as to buy an older home in need of renovation in a place like San Carlos using a mortgage loan.

But my absolute favorite demand for explanation involved defending a credit inquiry made by…the title company working with the lender on our loan. That’s right, folks, the lender was disturbed to find their title company actually doing its job.

In the end we got through the day. And I’m sure there was no personal malice involved, since people tell me mortgage lenders are like cell phone companies: some are better than others, but almost all are pretty bad. Anyhow, with luck, I’ll still have some hair left when we close. Assuming the underwriter doesn’t have a stroke reading something and we’re able to close, of course.

But I hope you’ll forgive me if I observe the mortgage industry is about as customer-oriented as a Soviet shoe factory. That only makes left shoes.

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