Morgage crisis? or Process crisis?
I figured that with all the turmoil in the market, it would be perfect to gamble and buy a house. After all prices are at an all-time low, so I went for it.
Since last November I have been looking at homes. As my Realtor can attest, I have gone through probably 40+ homes before finally finding one that I loved and bidding on it (and winning the bid).
Everything up to that point went smooth until I got half way into the mortgage process, THEN things started getting weird, I began getting irrelevant requests from the underwriters for getting 30 day history on ALL my accounts, meaning, my stock investments (in the toilet), my mutual funds (in the toilet) and even.. yes my one years worth of 401k’s (also in the toilet). They looked at my Canadian chequing account and questioned small deposits like $200 personal transfer from my friend for money he owed me (there were like 4 deposits, totaling under 800 dollars combined!). I laughed each time these requests came through, but I fulfilled their wishes. Well except for the 401k, I couldn’t get that in the time frame that they requested because ING direct (the company behind my 401k) sends paper reports out every quarter, and my last quarter was from December, and did not satisfy their needs (but we worked this out).
The next thing that started annoying me is that the underwriters began confusing my Canadian funds with my American funds, and my Canadian accounts (chq/savings, etc) with my American accounts. I understand that there is a Canada vs USA thing at this point, but why do they keep having to confuse my finances when I outline them clearly for them? Everything I send over is scanned to PDF and everything is noted and summarized.
It truly annoys me.
But that’s the beginning of it all, I end up waiting over 4 weeks for my mortgage process. And I am not someone that is easily impatient, but the process takes the full time I allotted to close on my house (procrastination anyone? or maybe just overworked and leave till last minute type?). And then 2 days before close, I get a call from my mortgage rep. “Bad news, you were approved for the mortgage, but the PMI company denied you based on your credit being under 700″. At this point I should probably provide some background, I had only 15% down for my house, and you need 20% in order to NOT pay mortgage insurance (PMI). Plus when I began the mortgage process my credit rating was around 750.
So as you can imagine, this news of being denied PMI came as a shock to me (as I received this notice at 11:30PM 2 days before the scheduled close).
Turns out that because I have only worked in the USA for the past 1 1/2 years, my credit history is vulnerable to being hit by something as innocent as 5 credit checks (yes, 5 is a lot, but I was hit 3 times by my OWN bank for some reason!?, the last 2 were all in order for my mortgage company doing their dudiligence). But that is besides the point, my denial was because my credit score dropped from 750’s to 694, which is terrible, because if you consider it, the sole reason for my credit checks was to get setup with a mortgage, so I could buy a house. The PMI company did not take that into consideration.
So now, after a month of a mortgage process, my mortgage rep is scrambling to flip me to a government backed FHA mortgage (because I cannot qualify at this point for mortgage insurance for a conventional loan). I am upset at the system, because I have done all I could do to qualify for a good mortgage, only to be denied by the very system that I marched to the beat of.
The questions are all too clear, is it a mortgage crisis? Or a mortgage process crisis? Because if this is the reflection of what people have to deal with, I am not the least bit surprised with whats happening in the market, and that nobody wants to buy (or can afford) a new house.
I’m pretty sure the answer is a little bit of both, but more of the process than the mortgage. Well to be more clear: The mortgage crysis is a result of the process crysis.
And its time for me to stop, as I’m starting to rant more about this, the good thing is, that I am (hopefully) going to be alright with closing on my home. And in the end thats all I care about.