April 9, 2009 | While we were all sitting around during Super Bowl weekend, my friend Jim mentioned that he was re-financing his mortgage at a very attractive rate through Fremont Bank, all through the internet. Thus begins my cautionary tale.
I was already familiar with Fremont Bank, having gone through the re-financing process with them back in the previous century for a condo in San Jose. That didn't work out because the real estate market had tanked at that time, and I owed more on my mortgage than the condo was worth, what is known as being "under water." Nevertheless, my experience with them was quite satisfactory, and I had no qualms about doing a re-fi with them, even though the nearest branch office is 500 miles away.
Feb 4, 2009. After checking the Fremont Bank website for their current offering, I ran the calculations and saw that a re-fi at their advertised rate (then 5.5%) would be a very good deal indeed: I could refinance from a 30-year mortgage to a 15-year mortgage with about the same monthly payment and save tens of thousands of dollars in interest over the course of the loan. I filled out the online application, hit Submit and was rewarded with the message that my loan was "conditionally approved" and was provided a link to a list of the documentation that would be required.
A couple of hours later, I received a telephone call from Rod who identified himself as my "Loan Consultant," and he went over the conditional approval of my "no points, no closing costs" loan and urged me to fax in the documentation. In the meantime I should be on the lookout for a loan application package that would come in the mail.
Wow, this is great, I said to myself, and fired up the fax machine.
The promised hard-copy package arrived, including a "Good Faith Estimate" showing that $1,319.28 would be required from me to close, attributed to $1619.28 "tax reserves" less the $300 application fee. So far, so good.
Feb 9, 2009. I received a phone call from a different person at Fremont Bank; Neetu identified herself as the "Fulfillment Specialist" who would be processing my application as soon as I submitted the documentation. I pointed out that I had already faxed the documentation; she took a moment and said that it was indeed there, that my application was complete. Just to be clear, I said, you're telling me that no additional documentation is required, you have everything you need? Neetu assured me that that was the case.
Feb 10, 2009. There was an email — from Neetu — saying that my documents were incomplete: "we are still missing your insurance declaration page and proof of 1st installment of property taxes paid off." There was no acknowledgement that less than 24 hours previously she had assured me the documents were complete.
I bit my tongue and faxed off the required declaration page along with an escrow statement from National City Mortgage, the holder of my current mortgage, showing that the money for the property taxes was in my escrow account.
Late February. I received additional phone calls from Neetu and Rod saying that because my house is on lease land, the no-cost option was not available to me so I would have to pay additional closing costs. However, each time I talked to a different person I was given a different amount.
I objected to the vague and confusing phone calls and insisted that I receive the new estimate of closing costs in writing. I was told that was impossible. I insisted. Of course it's possible.
March 6, 2009. I received from Neetu a new "Good Faith Estimate," this one saying that $1619.28 would be required to close, consisting of $1619.28 "tax reserve." The refund of my application fee had been dropped. Sheesh, I thought to myself, all of this just to keep the application fee! But, I will be saving all that money. "Proceed with the loan," I agreed.
March 20, 2009. Loan approved. I received a phone call from a third person who mumbled her name, notifying me that my loan was approved, the signing of papers would occur the following Monday, and that I would have to write a check for $2901.43 to close the loan.
44 days had elapsed since I made my application, and the amount of money I would have to come up with to complete the transaction had grown from $1319.38 to $1619.28 to $2901.43 — Hello?!
$1079.40 of the $2901.43 was for the payment of my April property taxes, but by this time National City had already disbursed the money to pay those same taxes. That didn't matter, they said. I would still have to pay that money unless I could come up with proof that the taxes were paid. And the loan statement from National City was not considered proof. That still left $1822.03 of non-tax costs.
March 23, 2009. A notary came to my house with all the loan papers which I dutifully signed. I also handed over $2901.43 but split it into two checks, one in the amount of the taxes and the other for the rest. I wrote a memo explaining why there were two checks and attached a copy of my current loan statement which showed the tax payment by National City.
March 31, 2009. More than a week had elapsed since the signing of the loan documents, and National City continued to show that my loan had not been paid off. I called Fremont Bank to find out what was going on. There was a delay, said the person who took my call, but she could not explain what the delay was. Have someone call me to explain the delay.
Late that afternoon, yet another person called from Fremont Bank who identified himself as a manager in the loan department. His explanation for the delay was that the bank had not received the "recording information" back from Riverside County and they couldn't complete the transaction until they had the recording information. Whatever.
April 1, 2009. My download from the credit union showed that both my checks had cleared the bank the previous day. Ah, it's finally going to get done!
April 8, 2009. Just before noon I received a call from still another person at Fremont Bank who said they had failed to charge me all the costs that I supposedly had agreed to and the documents would have to be re-drawn! 16 days after the documents were signed and we're starting over? No way! A week ago the only obstacle was said to be the recording information from Riverside Co. Have your manager call me.
Nearly 24 hours have passed, and no one has called. Now I'm MAD AS HELL AND NOT GONNA TAKE IT ANY MORE!
Having documented the chronology (above), I marshalled my arguments, the crux of which was going to be that I had been given very bad service and the latest move — 16 days after signing — was simply too much and amounted to breach of contract. From my point of view, I had signed a legal note and it had already been sent to the county for recording. If they had failed to account for certain amounts I considered that simply a cost of doing business with shoddy business processes and lax quality control. I expected them to complete the transaction.
I played out in my mind phrases that I would use, implications that I would make, point and counterpoint. I defined my bottom line: if they were unwilling to complete the transaction as written and signed, I would insist that they return my money and, if necessary, see them in court to get it.
After lunch and a relaxing pot of green tea, I placed a call to Fremont Bank, having had no call from them. Bernadette took my call.
"I am a very unhappy loan customer and I want to talk to a senior manager in the loan department, and by that I mean someone who has the authority to make decisions to resolve problems."
"Would you like me to check the status of your loan?"
"No, I would like you to connect me with a senior manager in the loan department."
After an indecent interval, Bernadette returned to the phone to say that she couldn't locate a manager to take my call, and could she take my number and have someone call me back. "That's what I was told yesterday, and more than 24 hours have passed without a call back." She promised, she promised.
Tick, tock, tick, tock.
"This is Mary at Fremont Bank. The manager has decided to waive any additional costs and the loan is being funded as we speak. The check will be sent overnight, and I will email them that it is on its way."
"Good. I have to say that from my point of view that was the only reasonable and acceptable outcome.... And I also have to say that from my point of view it should never have come to this."
"I totally agree."
Who's on first? This whole affair seems so amateurish that I'm forced to wonder how they manage to stay in business. It's disheartening that it always seems to take such determined effort before someone with authority will pay attention. It can't have been a hard decision; I didn't even have to use my artfully crafted lines!
The proof of the pudding will come tomorrow, of course, when I call National City and verify that they've received the check. Then I'll call Bernadette back to thank her and find out who her manager is so I can put in a good word for her. They obviously need more people like her on the front lines.
Next will be to resolve the tax issue. I do need that money back — Uncle Sam wants all of it, and more, just five days from now.
Last updated on Apr 13, 2018