Why I Hate Banks

[BaRbArIaN]

An alternative Subject line: why to banks there is no such thing as private property (unless its theirs)....   

Recently, the Mrs. and I were house hunting.   First time.  Had a few in our price range that didn't require total rebuilds, almost got one but the seller had someone ready to offer more and was just waiting hoping for even more and didn't get it.

Well anyway, we find a good place, 1/2 acre, small cape, large garage and deck, not too many repairs to bankrupt us.   We make an offer, they counter offer, we counter-counter offer and agree on a price (it had been on the market almost a year).      I then seek out 5k or so to have for closing costs (no money down, fixed rate not bad).    I end up selling some gold coins I have saved since about 2000 or so for just such an eventuality, the current metal value put them at 5500 or so.    My father was interested and I didn't mind the coins going to him instead of a pawn guy/ coin dealer, since if I wanted them back I could buy them from him later at the same price, so its not like he was giving me a loan (he really couldn't afford to just give me 5k, he's on a fixed income).   My wife puts 5k of it in the  bank a week or so before we go in for financing.

    We go into the bank (her credit union) and fill out the endless forms.  We get back home and the next day someone calls about that 5k deposit in her account.    In hindsight I probably should have had my father fill out the gift form even tho it wasn't one, because the wife tells them I sold some coins to my father (I had a bill of sale drawn up and we both signed it).    They want the bill of sale.   "Why?", I ask, "isn't the ceiling for problematic deposits/withdrawals something like 10k?"   "No," the banker says, "for mortgage financing, we can look at any deposit up to *$200*" he says.   Welcome to the Police State.   What business is it of theirs what private sale I engage in????  Well apparently if the deposit is unusual for that account and recent they get concerned we might be getting a loan or something they need to calculate for our financing risk.    To top it off, once they get a copy of the bill of sale for the coins, they call me back up and say their underwriter isn't ok with it and wants me to produce the original receipts for the coins.    Of course since 2000 or so lots of things are not around including those.   Now the wife is getting stressed since our chance at getting a mortgage now may be down the tubes over the lousy closing cost money source.       I hunt down the original dealer of said coins I bought them from years ago, convince him to fax me over a copy of my purchases from back then.      I fax it to the bank guy.      They come back and want the originals after a week or so.   I get uptight at them about this whole fucking thing being ridiculous and get to talk to the higher up and explain it rationally.   Somebody must have a perspective over there, since now they say the faxed receipt is now ok and the paperwork is moving along.

I really wanted to bail and go elsewhere, but am told that Federal regulations are behind their paranoia and over snoopiness and that I'd have an even harder time at other places where we didn't have account histories.   I also was far enough along in the process that I didn't want to stress out my wife any more than needed, and she really wants us to get our own house (me too but I haven't been planning it for years like she has).   So I put up with the bullshit.

We have a close date of November 15th, wish me luck, I don't ever want to do this again.    I would have liked nothing better than to have the money to just give the owners a check and tell the mortgage-seeking, over-intrusive, paranoid govt. toady parasites to fuck off.

Watch them find another reason to pork the deal, I'll update it here.

[Raineyrocks]

Oh man, what a pain for you!   I wish you and your wife good luck!

When we got our mortgage there were quite a few papers we had to sign and we were told they were due to the patriot act.

[jdemers]

Apparently, the Patriot Act is very interested in who takes out mortgages.... maybe because taking out a $200,000 loan can finance a lot of terror!  I witness mortgage closings, and nearly always have to make some sort of statement to the fact that I confirmed the borrower's ID for the Patsie Act.

In regards to your cash deposit, I am not sure if that is a homeland insanity risk, or actually the bank confirming that the cash was yours and not a recent gift.  Banks don't like it when you suddenly come up with a hunk of money, as they believe it is someone padding your worth to entice them to make the loan.  Its kind of like your parent's income when you apply for a school loan....they want to know where your money comes from.  That part I agree with, as its their term of the private contract establishing the loan.

[Kat Kanning]

Geez, $200!

[mike82934]

I had an experience kind of like this last week (more due to bank ineptitude than government nannying, but still annoying).   
My grandparents, my wife and I are buying some property in Texas that has six rental units on it, as well as two houses. We went into a local bank to get prequalification for it before we made an offer, and it all seemed pretty straightforward, as far as my limited experience in loans goes.
So, we get all the basics lined out, and then the loan officer notices that the property has six mobile homes on it. She makes the obvious and correct conclusion that they are rental units, so immediately lets us know that we will have to apply for a commercial loan, not a private mortgage (at 2 or 3 times the interest rate). So we asked if that was really necessary, given the fact that both of our families plan to personally live on the property, as well as my wife's parents, and that we will be able to easily qualify for the loan and make the payment without the rental income. No, she says, we assume that they will be rented, so we have to take that into consideration (or something along those lines).
All because of that, we had to get the owners to send records of the rental income to the bank (in the form of their federal tax returns), along with records of vacancy rates, upkeep costs, etc. Somewhere along the line I made the comment that maybe we should just pull the rentals off the property, get the personal mortgage loan, and then put them back on, to which the loan officer had no comment. I felt like asking her if she also needed records of our and the current owners' daily bowel movements, but decided against it.
To top it all off, we called her with a question later that evening, and she says something along the lines of, "Sorry, I was talking to my boss, and he said that we don't finance mobile homes, so we can't help you after all." 
We're getting it all sorted out with a different bank now, so it should be okay. But I feel your pain.       

[KBCraig]

My credit is crap, mostly due to the circumstance leading up to being divorced, and struggling to keep the house and pay off the marital debts. (Long ago, far away, before being happily re-married.)

When we make the move, I won't consider less than 40% down and a 10 year note. Outright purchase would be even better, even if we live in our camper while building our own hobbit hole. That will severely restrict our choices, but I'm not going to fall into that long-term mortgage trap again.

[lawyerup]

It will become almost impossible for an individual to purchase a home with a mortgage without two years of tax returns and the verifiable income required to purchase.  Stated income/stated asset deals have almost gone the way of the dinosaur.

Any lender will require proof for any deposit less than 90 days old as to its origin.

Hate them after you get your mortgage.  While you are going through the purchase process do not buy anything major on credit/revolving account or a new vehicle/furniture.  They will have to recalculate your debt to income ratio all over again.

[Russell Kanning]

it is all about control ... they want to track you and tell you what to do

[MaineShark]

Hmmm... we didn't have any of that nonsense when we got our mortgage.  And that was a 100% mortgage, with closing costs included, so it was by no means the norm.

I'd find a different bank, if they are giving you that sort of trouble...

Joe

[DC]

Hmmm... we didn't have any of that nonsense when we got our mortgage.  And that was a 100% mortgage, with closing costs included, so it was by no means the norm.

I'd find a different bank, if they are giving you that sort of trouble...

Joe

How long ago was that? Lending standards have been tightening up in the past year.

[BaRbArIaN]

Well so far so good, supposed to close tomorrow.    I'll believe it when we have the keys and the paperwork.  What a pain in the ass, I don't ever want to do this again. 

[mike82934]

Congratulations. 

[Dreepa]

I use to close mortgage loans.

The $200 rule is not a government rule it might be that bank's rule.

We had a $1000 rule where I worked.  They just want to make sure that you aren't borrowing money to finance the downpayment (and/or closing cost) because that would mess with your loan to debt ratio.

* It may be some sort of Fannie Mae Freddie Mac rule regarding the 'resale' of mortages so it could be related to the feds after all.