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Refi Gone Awry

So I was just sitting there at my computer, reading my email, minding my own business, in my usual state of insanity–but no worse than usual, when I get a forwarded email from my partner.  Our bank–whom shall remain nameless for reasons that will become painfully apparent–sent him an email offering to refi our home mortgages.  When we built our office a few years ago, we financed through this bank.  They consider us good customers.  Or they want to kill us.  I’m really not so sure at this point.  I suppose this was supposed to be a reward.

Who wouldn’t want to lower their mortgage rates?  (Well, except for that obnoxious kid on the Capital One commercial who doesn’t want 50% more cash–not Jimmy Fallon–the other one.)

CapOneKid

Do you want to refinance for a lower rate? NO!

So here is the email that was forwarded to me:

I wanted to follow up with both of you and let you know we checked on home mortgage refinancing and here is where [Gringott’s] refinance rates are:

On either a 10 year or 15 year refi with no cash out our current rate is 2.75% with no points. No cash out just means that you’re refinancing the current mortgage and or home equity you have on your home.   Please pass this rate along to [The Eye Life] as well in case he’s interested. If you decided to move forward we would place your request with our mortgage Rep in our VIP program which locks your rate the day you tell us and then VIP handling takes over.

Did you know that mortgage is derived from death pledge?  That explains a lot.  But I digress.

I have always been leery of those Internet ads–Refi at 2.3 % NO POINTS.  NO HASSLE.  NO HIDDEN FEES.  Click on Fred’s Bank to refi today!  I don’t know Fred.  I don’t trust Fred.  I’m not going to click on Fred’s link.  It just sounds too good to be true, doesn’t it?  There has to be a catch.  And if I’m making a death pledge, I want to know who is killing me.

But this was MY BANK.  This was not Fred.  I already have my current mortgage with THIS BANK.  This should be a piece of cake.  A slam dunk during March Madness.  And, I get VIP handling!  I might as well just start sending less money in now!

So I, in my usual state of insanity, answer the email, express my interest and tell them to lock in the rate.

Then, I get this email response:

 I think you’ve decided on the 15 year refi and actually the rates have inched up just a little from the 2.75 to 2.875. They have been going up and down almost every day for the past week or so.

The loan to value should be fine on your current mortgage and that is important to this rate. In regard to your [OTHER] home equity that has a limit of $51,000 if that stays in place it will change the overall loan to value.

So what exactly does it mean to lock-in a rate?  I asked.  They replied:

I’m sure you gave me the ok via e-mail so let me check and get back to you. I had four different requests at the same time. I’ll make sure it is set.

Does VIP mean Very Incompetent People?

Just a quick note to “Thank You” once again for working with me to refinance your home mortgage to a rate of 2.75% for 15 years. I appreciate your patience and I hoped we could get down to where we first started talking about.

I actually had a phone conversation-they called me because when I call them I never get to talk to a person.  It always goes to voice mail because they are busy with other extortions bank business.  My but they are busy!  Anyway, on the phone I was told she had good news–rates had dropped again and they would lock-in the 2.75% rate.  I seriously wonder what they would have told me had rates not conveniently dropped back down.  Either way, I think I am locked in right now.  Oh, yes.  I’m in jail.  A prisoner to this process.

I need an appraisal.

I just refinanced to 4.875% about five years ago.  This is Gringott’s–my bank.  Seriously dudes?  You need another appraisal.

It actually came in higher in value than the last one.  I’m not surprised, but I’m pretty sure I’m paying for that appraisal somewhere in that Good Faith Estimate they sent me.

And they need Title services and insurance.  All right people.  Who came up with this system of extortion?  Greedy goblins?  I have a 30 year mortgage with you now.  I paid for a title search and insurance for that.  All we’re doing here is paying one note off with the other at a different rate and term.  Is this really necessary?  It’s over two thousand dollars for this.  I still have 25 years of insurance left on the previous mortgage.

You will need Title Insurance to get into your vault!

You will need Title Insurance to get into your vault!

Apparently I don’t.

But I received an approval and commitment letter for the 2.75%.  I thought I could see a light at the end of the tunnel.

But do you remember that little home equity line of credit I had at another non-Gringott’s bank?

Well, I had to get a Letter of Subordination from the other bank. As things currently stood, if I defaulted on the loan, Gringott’s was first in line to pick the flesh from my bones.  The other bank would have to settle with what was left.  But If I refi, Gringott’s wants to make sure they are still number one ahead of the equity line.  Okay.  No problem.  The other bank was already second.  I’m sure they will be happy with that.  I have personal accounts with them as well.  They are my bank too.  I know them.  I trust them.  Maybe they’ll give me VIP handling as well!

Not so much.  I had to pay $200.00 to get a Subordination letter.  Which then led to this . . .

We received the subordination for the [non-Gringott’s] line of credit. With the line amount of 51k this is creating a pricing add on of .5pt as the combined loan to value exceeds 80%. In order to keep the rate of 2.75 with no points we would need to have the [non-Gringott’s] line paid down to 30k and the line amount decreased to the same amount. Is this possible for you to do at this time?? Once we close on the mortgage our retail branch could do another home equity up to 85% and close out the heloc with [non-Gringott’s]. The only other option for keeping the 2.75% would be for you to pay the .5 pt pricing add on. I do apologize as I was not aware of the home equity until the title work came in. Please let me know which way you would like to proceed.

I would like to strangle someone.  Apparently that is not a legal option. Gringott’s KNEW about the HELOC in the very beginning (see above email.)  Come on people, these two banks lent me these loans when my property was actually appraised for LESS than it is now.  If I can’t afford to pay my mortgage at the new lower rate, how in the hell am I going to pay it at the old HIGHER rate?  Helloooo, McFly!

And I was already approved.  I received a GOOD FAITH ESTIMATE which did not include a 0.5 point fee.  Are these pieces of paper worthless?  Is there no Good Faith?

I have no intention of letting Gringott’s handle both loans, so I opted for the latter option.

I believe looking at the add on and the fact that you have made more payments to your current mortgage. I will not need to change the loan amount to cover this cost. The payment would remain the same as you were quoted to begin with. Again, I really want to apologize for this error on my part and want to work through this so we can continue with closing.

Isn’t that special?

I should have clicked on Fred’s bank.

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