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Meat Me at the Mortgage Closing

MAR 7, 2013 2:53pm ET
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WE’RE HEARING that a refinance now sometimes comes with your choice of dinner meats.

This is not a case of “do you want fries with that?” but apparently is a case of one national association being proactive when they inconvenience a customer. Good public relations are always part of maintaining the reputation of a business. Hiring more loan processors would also be a good idea. (I’m not going to say which big bank this was, but they were famous in the 1800s for their stagecoaches.)

My physical therapist volunteered this story to me about her refinance when I mentioned to her I was writing a column about the mortgage industry. She recently completed a refinance of her FHA mortgage. She complained of excessive delays in the processing of her loan along with some other typical stories of documentation getting lost, no one returning calls or emails and multiple persons working on her file and not being familiar with it.

For whatever reason, her refi loan took six months to close. Then she described a few more details which I found interesting. The lender sent a representative to her business one night with loan documents for her and her husband to sign. She said the lender’s representative came to the meeting in “torn jeans and a ratty University of Michigan sweatshirt.” My friend also said she felt that this person appeared “a little sketchy.” Nevertheless the loan documents were signed and she said she was glad it was over.

About two weeks after closing my physical therapist received a coupon in the mail from her lender along with an apology letter for the delays in closing the loan. The coupon entitled her to select some frozen meats from a company which delivered the food right to her door. She said she went with the chicken shish kabobs. I thought this was a little bizarre but at least one big company is trying to make up for excessive delays and a customer’s bad experience.

I recently was representing a seller on the sale of a residential home that was part of an estate. Both the lender and title company inconvenienced me a lot and caused a lot of delays asking for documents that were supplied to them multiple times. I am not holding my breath waiting for an apology but this particular sale bears mentioning. Not because of what I heard but because of what I actually saw.

When you are selling a home out of an estate you need to have it appraised as of the date of the deceased person’s death so you can document fair market value for income tax purposes. My client found and used a licensed appraiser near where the home was located to do this. He also found a buyer on his own which happened to be one of the next-door neighbor’s grown children.

My client’s appraisal came in at $180,000. When he told me the buyer was willing to pay $200,000 and I was preparing the contract of sale I told him the deal would probably collapse because the lenders’ appraisal would not come in over 10% higher than his appraisal. After all it is 2013 not 1999 right? Well the lender’s appraisal came in at $200,000 and the deal closed. My client was real happy.

For my own curiosity when reviewing the closing documents I checked out the buyer’s interest rate and closing costs. I saw on the HUD that the buyer was paying over two points and felt the interest rate was really high. More interesting was the charge for the appraisal. How does $630 sound? To me it sounds high just like the interest rate and the appraised value.

Based in Chelsea, Mich., John McDermott is a real estate and elder care attorney who represents both consumers and businesses. He can be emailed at jamcd@comcast.net.

Comments (3)
$630 seems about $200 high for a single family home. For areas that require more time for research and travel I've seen appraisal prices in the $550 range. Higher than that would be homes $1M or more.

As a mortgage broker I find most home purchase appraisals still come in at the purchase price. My guess is the estate appraiser made a condition adjustment that the purchase appraiser did not.
Posted by tim e | Friday, March 08 2013 at 4:53PM ET
Yep, that rate sounds a little high for a single family home, BUT in order for appraisers to get their "fair price" we will see rates continue to escalate.

I like your title "meat me". A friend of mine who had a weird loan and could only refi at the servicer took 6 months to close. I actually had one take 6 months because that same servicer had a second to subordinate. Banks are taking soooo long to close, another reason to use brokers.

As to the guy showing up in the sweatshirt, you can be sure the bank will hire the cheapest just like they do with appraisers. HVCC = home values at cheapest cost.
Posted by | Friday, March 08 2013 at 7:41PM ET
give me a break, a notary closer who shows up in a sweatshirt. First of all, a closer just doesn't "show up". A closing time is set. I will admit, I have had a couple of notary closers who looked less than professional. Just because my regular closers were booked and I asked the title company to send someone out that they have vetted. The closer turns out to be less than professional and I let the title company know or deep 6 that title company.
Posted by | Saturday, March 09 2013 at 8:18PM ET
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