March 12, 2011 | When I accepted the offer on my condo in mid-January, it was supposed to close in 30 days — that is, by mid-February. It's now mid-March, and it's still not closed.
Based on my own experience buying this house and selling the condo, I am here to tell you that real estate transactions involving bank financing now have become sisyphean ordeals.
The buyers of my condo are going through the exact same hell that I went through trying to get financing on this house. At every step along the way another hoop to jump through appears in the path, each more ridiculous than the previous one.
The first sign of trouble was when my agent showed up with an amendment to the purchase agreement to extend the close of escrow to the end of February because "the lender, Wells Fargo Bank, needs more time to get the Indian Leaseholder's approval of the new loan."
Huh? Since when do the Indians have to approve a loan? No sensible answer was forthcoming, but I happily agreed to the extension; I wanted the deal done, and if it took a couple of additional weeks, so be it.
As the end of February approached I called my agent, hoping to be reassured that everything was on track. Oh, everything is fine, it just might take a couple more days. Whatever.
After a few more days had passed I was told that escrow would close on March 4th. As March 4th approached I asked the obvious question. Well, it might take a few more days... Probably by the 10th.
As the 10th neared, I was afraid to ask, but I did. We're still waiting for the loan documents from the bank.
You told me a long time ago that the loan was approved!
It was, but the bank is asking for more documents before they issue the loan documents.
By now I'm in WTF mode and will get straight answers. Documents? How many documents? What are they specifically? Seven, six of which were already sent to the bank weeks ago. When did the bank make that request? When did you send each document? And what about the seventh, what's that? Another inspection form, an obscure one that I'd never heard of before. And suppose the bank doesn't ask for any more documents after this, then what has to happen? That's it, then we get the loan documents and we can close. What about the Indians, I've been told all along the delay was because of the Indians? Well, yes, the loan documents do have to go to Fey Canyon and the Bureau of Indian Affairs before we can close. And how long will that take? Realistically!
Oh, I forgot to mention that the bank had previously decided that 20% down wasn't enough, they would need 25%.
If I could have waterboarded somebody I would have. When all the cats had been shaken out of the tree, the situation went from "it's done we're ready to close" to:
The mind boggles at the sheer number of opportunities for foot-dragging and delay while somebody gets to the pile of papers in their intray and acts on them.
And the original excuse — "the lender, Wells Fargo Bank, needs more time to get the Indian Leaseholder's approval of the new loan"? Totally bogus. "The Indians" may very well take their time, but they don't even come up to bat until Wells Fargo stops making demands and actually executes the loan.
It's not that these are risky borrowers. They own a lot of property and have a lot of resources. Another 5% down? Okay. It's all about the banks. They've gone from loosey-goosey, mortgages for anybody and everybody to hoarders sitting on their capital and profits so they can give themselves big bonuses while credit has dried up, even for people who at any other time would have been considered extremely low-risk, almost ideal borrowers.
Meanwhile, the backyard landscaping and kitchen projects are on indefinite hold, and I'm not filing my tax returns, although I've already finished them. Until I know for sure I have the money to pay, nothing's happening.
Last updated on Jun 3, 2016