Why I Recommend Using a Local Mortgage Lender

Regular readers of this blog will know that I champion local businesses, especially those in the Brookside/Waldo area.  Recently I had a client who decided to use a large, national lender for his mortgage loan to purchase an Armour Hills home.  I advised him that it would probably not close on time and recommended he contact Michael Kauffman at the Brookside Bank Midwest location.  He did contact Michael, but decided to use Bank X (I won’t name the bank, but you would know it!) because of a previous transaction with them.

“Jeff,” I said, “here’s what’s going to happen.  Your local contact will provide excellent service.  She will tell you that everything is going well.  She will say all of your paperwork is submitted and the loan should go through, no problems.  Then, a few days before closing, your local contact will get a message from a processor in some other city, requiring you to submit more paperwork and demanding other conditions be met before underwriting approves the loan.  You will have to scramble to meet the requirements,  and it will cause you, and the seller, a lot of stress.  And your closing will be delayed.”

And that is exactly what happened. Two days before closing, the lender demanded repairs be made to the property, even though no repairs were negotiated (we negotiated a price reduction).  The lender had the inspection well over three weeks prior to closing to review it–the required repair list was sent two days before closing.  Why?  Because I think the  out-of-town processors don’t even review the file until 48 hours before closing, and then raise the red flag.

My buyer was very upset.  We had to drop everything and get repair bids, schedule contractors and submit receipts.  Which we did. But yet..the closing was STILL delayed by five days!  My buyer had to pay additional rent and the seller (who, fortunately, had moved out and was not purchasing another home), generously let my buyer move in prior to close.  Of course, when Jeff found out about the delay, he called Michael to see if he could switch the loan to Bank Midwest–but it was too late.

Next chapter in this story….poor customer service follow-up!  My buyer wrote a long letter to his Bank X contact, outlining step by step the problems caused by the delay.  He politely asked for a lender credit on the HUD to reimburse him for the rent money he had to pay.  Bank X refused, saying “it would set a precedent “ for other customers who experience similar problems.  Sadly, the local lender contact didn’t even go to bat for her client, pushing for some sort of compensation with her manager.  And I know  Bank X has given lender credit before in other delayed deals. ( I’ve heard plenty of stories about that from my fellow agents.)  There’s the  true reflection of how  much they ‘care’ about their customers. The letter was ignored.  Not even a written response back to the buyer.

So, lesson learned once again, about the benefits of spending your money with  locally owned businesses.  Most of the time you will get better service and keep your  money in the community.  Buy local!

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