Dear
Perspective Fifth Third Bank Customer,
Before
paying any money to Fifth Third or signing any documents, I urge you to read
the following account of my mortgage refinancing experience. I hope it will be
sufficient to make you walk away quickly, before Fifth Third extracts any
down-payments.
My plight
began on 5/29/2012. As many of my countrymen, I am underwater in my real estate
and am unable to refinance by traditional means. Fifth Third bank was listed in
Freddie Mac’s syllabus of lenders who finance under HARP and approve
loan-to-value ratios of up to 125%. Since the market rates for mortgages were,
and still are, significantly less than my rate of 2007, I had but a single word
to utter: SOLD. I called several local branches including:
*
Kelly
Price - 837 W North Ave
*
Martha
Ramirez - 1209 N Milwaukee Ave
*
Michael
Klein - 29 W Division
*
Ken
Dickerson - 900 W Armitage
Of these,
surprisingly, only Ken Dickerson chose to call me back which should have served
as red flag enough to walk away. But in my mistaken wisdom of convention, I
figured that a person with a credit score approaching 800, a solid, long-term
job and a property that fits pretty well within the government’s idea of relief
that I could refinance without the point and pressure of an independent
mortgage broker. Those people, I have always thought, made their pennies on
pushing regular people over the cliffs of asymmetric information. Perhaps. But at least our interests overlap at the time of
closing. I do not know how people at Fifth Third get compensated but however
they don’t or do, they show absolutely no interest in closing their customers.
By 5/30, Ken
Dickerson had locked my loan at 3.99%. Not bad considering I resisted all
tactics to upsell and all promotions and points and still got a pretty decent
deal on closing costs. Making timely payments SHOULD have its privileges. Ken
advised me that the process could take 2 months and set a closing date for
July. He also advised me he was very busy and calling to follow-up would be a
waste. He’ll call me he said. Red flag 2.
The next
time I heard anything meaningful from Ken was 7/12. I had to follow-up since I
hadn’t heard from an appraiser and my lock expired on 7/30. Could they have
appraised my unit from outside? No! Better! They appraised using Freddie Mac’s
Automated Valuation Model. This is truly
genius. Fifth Third lists on their HUDs: charges of $350 for the appraiser and
$140 for the Appraisal Management. 2 lovely scams in one! First of all, the
appraisal isn’t 500 as with other banks - no, theirs is only 350, the
management company fee is just a line item you shouldn’t notice. And then, why
not just use the AVM and pocket the entire sum outright? This may be a rounding
error on the corporate luncheon bills but it’s a meaningful sum to the average person
who needs HARP. This, by the way, was the last I’d hear from Ken Dickerson, Nationwide
Mortgage Registry # - 716410.
By 7/14, I
was contacted by Lisa, Ken’s processor, asking for some data. This alarmed me
not at all since the originator seldom bothers with the tedium of details. But
as my phone calls in to Ken remained unanswered - for 10 days - I grew
genuinely worried. After all, my lock expired 5 days from then. I looked up
another way to contact him.
In our inter-netted
world, finding anything on anyone is no hard task. There is no information
security and it seems that we don’t want it. There is just obscurity but those
of us whose name is not John Smith, don’t even have the cloak of that. Turns
out, Ken Dickerson had another job! At Wells Fargo, as stated on Linked In and
the Wells Fargo site itself. Now, I was not angry with Ken at first. Many
banks, in their security obsession, immediately cut off ALL employee access to
their systems and I have even heard before of employees being escorted out
forever by security. This was not such a case. Everyone knew for a long time
that Ken was leaving and could not be bothered to transition (or even inform)
any of his portfolio of customers. His cell phone is still the same. He could
have called me if he cared. He doesn’t - and probably won’t care about you
either.
From this
point, I will organize my experience like a not-so-dear diary.
07/25/2012
Enter Walter,
Area Sales Manager. Walter was Ken’s manager. The same one who decided that
Ken’s customers need his silence? I don’t know. But he would be handling me
from this point forward. Excellent I thought. Until, a short time later, I
realized that the guy responsible for 50 guys like Ken was probably their
enabler-in-chief.
Ken and
Walter, despite my telling both of them, had chosen to either not to hear, or
forget the fact that I had a second mortgage through my old lender: Provident
Funding in California. In HARP refinances, the borrower is unable to borrow
more than his current debt on his primary mortgage. This is RELIEF, remember?
Not cash-out. Naturally, I had no idea of the process and hoped that people
who, you know, WORK in the industry could guide me. Walter instructed me about
the "subordination process" to which a second lender must agree before the
primary could be refinanced. This, Provident does on a case-by-case basis. Of
course they do. Again, I am a pretty decent credit risk and have always made my
payments to Provident and everyone else on time. So, once they got their $150
fee to prepare the subordination things were golden. Or were they?
Provident
states clearly that they ONLY ship the package at the borrower’s expense via
FedEx. I asked Walter if I needed to obtain this label. A firm "no" was his
response. This he reaffirmed while standing in my house collecting the
cashier’s check so we could present Provident a united front and just one
package. One never knows what confusion 2 separate packages might cause. "We’ll
take care of it" said Walter.
And, by
taking care of it, Walter meant he shipped his corporate UPS label to Provident.
Remembering the instructions I was ready for a problem. By now, it was 8/9/2012
and my lock had been extended. "This will be free of penalties" Walter
proclaimed. He must have forgotten that I already paid my August mortgage at
the higher interest rate, by now rates were down to 3.5% while I was re-locked at
3.99%. This gave the bank an already healthy spread and Walter tells me that I
won’t get penalized for his and his staff’s ineptitude. Thanks, I guess. And I
went on my vacation.
From upstate
Washington, where a cellular signal is far from assured, I monitored what I
knew would be a problem. Neither Walter/Fifth Third nor Jodie/
Loss Mitigation Specialist at Provident would budge. Had I the ability
to go to FedEx and arrange a pickup I would have. And, while Walter claimed the
entire time that he would PERSONALLY arrange the prohibited shipping vendor he
never did. FedEx was blocked by Fifth Third’s corporate firewall he said. He’d
need to go to a physical location. The absurdity of this should not easily be
bypassed. Does his corporate cell phone even work in a FedEx facility? Does his
car? What about the credit card? I’ve heard many tales in my time but claiming
that a company, even a bank, blocking vendors they don’t use means that Walter
takes me for a buffoon of a very high order. Maybe the fact that I was still
awaiting his assistance meant I was.
The days
grew into weeks as Jodie pleaded with Walter to provide a label. She and
Provident are not completely without blame for ridiculously strange rules but
they were as clear as crystal in the vendors they allow and, most importantly:
THEY DON’T NEED ANYTHING FROM US. For all Jodie cared, I can stay with
provident for life paying double market rates. By 08/27/2012, Jodie finally
took pity on me and walked the subordination agreement over to a UPS box. I
asked Walter for an update every day. He ignored me expertly. I didn’t even
know if they approved the sub. By 8/30/2012 I knew they had. Victory! I hoped.
But no! I needed to provide the entire financial picture again! I may have been
fired or rung up debt in the meanwhile right? Fine.
They also pulled my credit. Each pull, materially affects my credit score and
potentially increases my cost of borrowing. There is a lot attached to this
little number. We all know not to go applying for credit with impunity. On
08/30/2012, they also ordered another payoff statement. It never occurred to
anyone that we would NEVER EVER close in August with a day remaining. Each
statement costs me $20 and, since obviously I would have made a payment since
the last one, there would be another on my horizon. Spending other people’s
money is never a problem for big banks.
09/13/2012
I remain in
the financial purgatory of Fifth Third Bank except whereas Dante had Virgil to
guide him, I have Walter. I will argue that my very presence in this hell is
Walter’s doing in a large degree but that’s irrelevant. I emailed Walter for an
update. He emailed back to say he needed "a few." That was 3:18 PM and it’s now
6:34. "Few" hours perhaps.
As we
approach what I hope is the parting chapters of this letter I think it is
important to illustrate how Fifth Third in particular but probably all banks in
general cheat you, the prospective mortgage payer. They rely on your ignorance
and their fast-talking salespeople to push you into deals you should never
sign. I have a Finance education, am a computer nerd by profession and live a
life of partially repressed obsessive compulsion. Meaning I know every penny of
my finances, my point of currency in the amortization schedule, and have
pre-written Excel functions to calculate everything any lender could possibly
tell me. If I am taken for a ride this badly, how can the average borrower
expect to not be duped?
Escrow:
At this
time, it might be useful to see how Fifth Third Bank, either by obfuscation or
plain thievery, attempts to cheat honest people into giving them loans. What
else do you suppose an escrow account is? It’s an interest-free loan you are
making to the bank. The below three scenarios illustrate my escrow account
during 12 months of deposits and semi-annual tax payments with Provident. The
first shows a cushion of 0 - which almost no one does because they don’t have
to. The second shows the maximum allowed cushion of 2 months (2/12=1/6) of the
annual tax payment and the last shows Fifth Third’s proposed accounting. They
would be required to disburse this amount to the borrower but, I don’t know
about you, I’d love to have 2500 sitting in my account, earning interest for
me, not for them.
I don’t
completely discount escrows. Remember that you don’t actually own your places.
The banks do and let you live there as long as you pay your mortgage AND...your
taxes. So if you choose not to pay them your municipality can seize your
property. If they didn’t collect taxes you could, potentially, in that scummy
way of yours, cost the bank big money and this adjusts your risk profile. If
you have the option to forgo escrow, it will almost always cost you
points/interest.
Taxes:
Taxes are
receding in Cook County. We know this. Not fast enough if you ask most people
but at least they overcame inertia and are moving in the right direction. Fifth
Third Bank chooses to ignore obvious and public information on approved 2012
rates, homeowner exemptions, and surplus funds.
My rates and
estimates should have been done properly. No borrower should have to battle
this to get his escrow ordered properly. I do not believe that average people
should be in the business of loaning money to banks interest-free.
Out of
Pocket:
My total
out-of pocket currently is $395 to Fifth Third, 150 to Provident and the $651.72
x 2 extra months that I pay in additional interest compared to my Provident
Rate - total: 1303.44. My total out-of-pocket is 1848.44. Walter claims that my
closing costs of $2100 would be covered. If so, great.
If I walk
away right now, I could probably lock a loan for 3.615%. Depending on how long
it took to close, I could make up the difference in about 2 years. If I arrive
to closing and things are out-of-order, I swear I’m walking out.
09/11/2012 Payoffs:
Walter sends
me HUDs with a loan amount of 3k more than the original. Is this how he
"pretends" to absolve me of my closing costs? Upon protest he explains that he
was operating on a decrepit payoff statement. WHYYYY?
One may ask. But it turns out he just wants to order another one for 20$/pop. Walter
does this every day. I hope. (He claims he’s busy - too busy to call me
certainly.) So why couldn’t he just do what I did below? It took me all of 3
minutes based on the other payoff statement. I would have granted him 10
because he probably didn’t have my amortization schedule in front of him but
still. Was he hoping I’d not notice and just let him pad the loan with all my
promised closing costs and then some? Nothing would surprise me at this point.
09/13/2012 -
trying to get an update:
Walter is
not an email person. He answers calls pretty well but not today.
09/14/2012
Walter
decides to answer email but not the call. This is a rarity. I hear from Lisa
George (processor) who says the underwriter insists on seeing "documentation"
of a 7k deposit into one of my savings accounts. The source was my Citibank
savings account after they dropped interest rates from 1% to .1% overnight. Why
would I keep any money there?
Lisa emails
me to tell me that we’re set to close and asks for my availability. ASAP is the
answer. But I still await an accurate reflection of my costs and payment.
Walter remains silent.
09/15/2012
I downloaded
the new documents - thank you.
There remain
a couple of issues which, although known for some time, Walter has been either
unable or unwilling to resolve. I am hoping you can provide an explanation.
From this
prior email, only issue #2 is no longer fully relevant - however, Walter and I
agreed to a credit ~2100 to account for the inappropriate charges for
appraisals since one was never done.
My main
question is on the loan amount. Every form I download shows a higher number.
Mainly, I would like to know where the extra money goes. Based on Provident’s daily interest rate, the payoff, if we close on
9/28, should be: (Btw, I’d love to close earlier - ASAP)
balance |
$351,179.87 |
60.2205 |
|
28 |
|
int
to 9/28 |
$ 1,686.17 |
Payoff stmt |
$ 20.00 |
recon |
$ 52.25 |
$352,938.29 |
Where is the
other 6k reflected in the original loan amount going? And why does it keep
growing to begin with? Is there human interaction responsible for it or is it
computerized? In any case, any loan amount over 354k is in clear violation of
the subordination contract with Provident.
All I
require is an explanation. Could you either provide one or chase down someone
at your office who can?
Thank you,
Me
Walter
Sat
9/15/2012 10:13 AM
Actually,
I
believe there were 5 questions you had. I thought we discussed each of these,
and I know you had a question on the payoff and loan amount as well. I
instructed Lisa yesterday morning to change your loan amount back to $354,000.
Your
credit is showing in our system as $1793.93. As I stated earlier, I can not print out a Good faith Estimate - they do not allow
me to
There
will be no appraisal fee since an appraisal was not done. On the closing
statement, you will not see an appraisal fee or an appraisal management fee.
You WILL see an appraisal fee waiver - I believe that is $75.00. Lisa, if I’m
wrong, please correct me. You will also see your $395
as a credit on the HUD-1 settlement statement at the closing.
Finally,
the escrow account will show the amount of money needed to pay your taxes plus
two months- the amount we are required to hold "in reserve".
I
will call you to discuss as well.
Sat 9/15/2012 10:57 AM
Thank you for
replying.
None of this is a problem and i certainly understand tech limitations.
But please accept this inability to accurately assess my position as my fair
warning that I will not sign any document where inaccuracies persist.
Thanks.
Sat
9/15/2012 11:03 AM
I
agree - and it will make a lot more sense once I can show you the closing
statement - which, unfortunately, won’t be until we set a closing.
What
I propose is us setting a closing ASAP but 4-5 days out os
that closing ahs timer to prepare a package early.
That way, if there are corrections, we can make them and still ensure a smooth
closing. Agreed?
Have
a great weekend!
9/21/2012
We
seem to have a proper closing. Walter shows up on time and actually starts
hunting for the closing agent from First American Title and Trust (630.799.7389).
He arrives somewhat on time - we certainly understand being new to city traffic
and coming from O’Hare.
There
is an extra $304.79 for a supposed "principle reduction" that was never agreed
to or in any documents. Of course, had they actually sent over preliminary
documents we would have caught it pre-facto but Walter and his team at Fifth
Third Mortgage were just simply not capable of this heroic effort.
The
other copies of the forms do not contain this amount and I’m not going to botch
the closing for 300 bucks that they’ll hopefully refund the next day. I know I
said differently but have just no more fight left in me.
100
signatures later, we are done. Included in the forms is an auto-debit form. We
attach a cancelled check because I still have some from 2005. I only write
checks for people as gifts and may even stop doing that with the advent of PopMoney. So if you need a cancelled check from me, let me
know! I wish I could cancel all of them.
Would
it be anti-climactic if I told you that neither the form nor the check made it
to where they were supposed to go? Would it also surprise you that they didn’t
actually send anything in the day I signed it? I hope not.
9/26/2012
(rescission period ended on 9/25)
From: Me
Sent: Wednesday, September 26, 2012 9:39 AM
To: Walter
Subject: Refi
Walter,
Did everything conclude correctly
with the closing? My check has not been cashed and Provident shows no changes
in the loan amount.
Do I need to call the title company?
From: Walter
Sent: Wednesday, September 26, 2012 9:53 AM
To: Me
Subject: RE: Refi
They
start counting the day after. Funny thing - Saturday actually counts as
a business day!
From: Me
Sent: Wednesday, September 26, 2012 9:55 AM
To:Walter
Subject: RE: Refi
One
learns new things every day!
I’m
still waiting to see what the story will be with the "principle reduction"
(that extra ~$300) since only one copy of the documents had it. In you
experience, do title companies routinely try to sneak in things like this and
hope no one notices? I don’t really care about the reduction - just so long as
it’s not a little bonus to the title agents.
Anyway, thanks for all your help.
From: Walter
Sent: Wednesday, September 26, 2012 10:00 AM
To: Me
Subject: RE: Refi
No,
they are not hiding it, they will apply it.
9/26/2012
The
old mortgage is indeed paid off. It just takes Provident a day to post it.
9/30/2012
I
receive the refund for the $304.79. Looks like genuine stupidity triumphed over
disingenuous dishonesty.
10/4/2012
I
receive a payment coupon book and assume it’s just routine.
I signed up for auto-debit remember? Why would I
expect the payment coupon department to know what the auto-debit department knows
right? This is a bank that took 4 months to close and couldn’t even tell I had
a second mortgage. PIN searches are not part of the mortgage brokers’ duties I
guess. In Walter’s defense, this FAIL was on Ken Dickerson.
I
give up after 15 minutes of waiting on hold.
10/16/2012
I
put in my earpiece and call the help line. I also want to set up online access
but no way is this something that should be clear from the web site right?
People might sign-up on their own. Perhaps this is why the hold time is what it
was? After 10 or so minutes, I get through (time flies when you’re trying to
read code while on hold and trying to ignore the idiotic music). Also, Fifth
Third Bank has a really interesting tactic in that the music fades into empty
silence every minute or so which makes the caller wonder if the call is still
connected. Perhaps this is how they auto-disconnect people and prevent them
from calling back immediately.
Anyway,
the gentleman lets me in on the secret. My login is my incredibly secure (known
to every phone rep EVER) Social Security Number and temporary PIN is XXXX.
Well, actually, it’s 3795. I already changed it so don’t get ideas. But if this
novel’s worth of complaining can’t convince you to finance somewhere else, try that
PIN and see if it starts this way for everyone.
After
obtaining the super-secret key to online access, I am forwarded to the Auto BillPayer department where a woman answers. "We didn’t
receive anything" she proudly proclaims and because the 80 signatures they had
from closing are insufficient, I will need to fill out ANOTHER Auto Debit form with
a signature and FAX it in!!! Yes, in 2012 we are using technology from 1973 to
make sure that I am myself and have not yet jumped out of my skin from this
experience. I ask her if this call is being recorded. She says yes. "Good" I
say and begin a narrative of this complaint. She hangs up. Or maybe she faded
with the music. Or maybe the disconnect is automatic
when the customer actually begins talking.
I
call First American Title 630.799.7389 and ask if they still have my form. To
my delight a woman answers on the second ring without sending me into a maze of
"we appreciate your call" (so much that we want you to hang up). They have
nothing. I inform the nice young lady that they are also party to Fifth Third’s
stupidity and I will, if I find out that it was they and not Fifth Third that
put my document anywhere other than where it belonged, reserve appropriate
domain names and tag them much and often. She understands.
I
call Walter. It’s been an hour and a half. No calls.
Walter
called at 4:40 PM. No answers. No knowledge. He’s checking. Called back 2 min
later, offered to give me the third-party service Fifth Third uses. I asked if
he really thought I would have bothered him unless I already called and struck
out. He said he’ll call back tomorrow.
*
Mealschpeal; http://www.mealschpeal.com