Wednesday, August 26, 2009

When the Bank Calls

I need to stop answering the phone ... or maybe change my phone number so that the telemarketeers can't find me.

This time, it was the bank that bought my mortgage when my original mortgage holder went belly up, and apparently, my original, original mortgage was owned by one of the pseudo-government lender FM twins.

So, the guy is giving me this big spiel about what this new government home mortgage program can do for me.

Okay, I had to give him a little latitude. He doesn't know me ;).

So, blah, blah, blah ... lower interest rate ... blah, blah ... save tens of thousands of dollars ... blah, blah ... something something APR.

"What's that?" I ask.

He says it has something to do with the government assigning this extra fee for giving me the privilege of refinacing my house loan at a lower interest rate. Not a very good explanation and certainly didn't answer my question of what it was for, and how it affected my loan.

But, okay, continue.

So, blah, blah ... Can I pull your credit report?

I say no.

He says he'll just run some numbers, then, and what do I think my credit rating is on a scale from 1 to 10, and so I tell him, and based on my answer he can get me a loan for 4 something or other percent ... and that mysterious 5+% APR (you know, because the government is doing me a favor, right?).

The gist was that I could reduce the loan period, decrease the interest rate, and increase my payment by a mere $40 per month. I'd end up saving almost $100,000 over the life of my loan. WooHoo! Sign me up!

No, wait. I'm just kidding.

I already knew that I wasn't going to refinance. Not tonight, anyway. Deus Ex Machina wasn't here, and there's just no way I'd make that kind of decision without him. I'd expect that he'd do the same thing for me.

And because I already knew that I was saying no, I had to ask the guy ...

"You're telling me," I say, "What this loan will do for me, and I get that, but tell me, if it's going to save me money, it's taking money away from the bank. What does my refinancing right now do for your company?"

I mean, seriously, if we've learned nothing else since September 2008, it is that every corporation in America is in it for the money. Profit is the bottom line, and if there's not something really significant in it for them, there's no way they'd be offering me this great deal.

I just wanted to find out if he'd tell me what the bank is getting out of my refinance.

He actually got pissed off at me over that question. I think it was a fair question.

Don't you?

I told him I'd talk to Deus Ex Machina, and IF we decided we wanted to refinance, we'd give him a call.

8 comments:

  1. See if you can find info on recourse vs. non-recourse loans. If the worst were to happen and you were headed for foreclosure, it used to be that the bank could not go after other assets. Apparently newer loans allow them to chase you down for as long as they can.

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  2. The minute a corporation tells me that its going to save ME money, I tune them out. Get real-no business wants to SAVE me money-there is always a catch, and these sneaky b@#$%^&@ know ALL the catches!

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  3. Moral of the story (and past two posts)---stop calling Wendy!! LOL!

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  4. I work in the banking industry and I can tell you that a bank will definately help you save on your mortgage. Because if they don't someone else will. They would rather lose $100K in interest than lose ALL the interest on your mortgage to another lending institution when you decide to refinance with someone else. So in the end, the bank is still greedy.

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  5. e4 = Even though it sounds like a good deal, there's a bottom line in there somewhere that makes it a bad deal for me and good for the bank, and even if he was on the up and up, and like he and jdubb say, it's to keep my business (although I wasn't planning on finding a new lender in the first place, and I told him that - in the first place), there's still the $400, up-front, processing fee (kind of like "earnest money"), and then, there's the 5.163% APR, which I never did figure out, because he told me that the terms of the loan were based on the 4.6590210% interest rate. Then, there's the closing costs, which would be rolled back into the loan, which would increase my overall debt, and every time we refinance, we just get deeper in the hole. I just want to get out of the hole, you know? Refinancing is not on my agenda.

    Sue - same here. Big business is big, because they make lots of money, and anyone who is in it solely for the money is not trying to do little old me any favors. There's something in it for them - more than just keeping my business. The days of giving a damn about the CUSTOMER ended years ago.

    Bezzie - Yes! Yes! Stop freakin' calling me. The answer is NO, no, a thousand times no! *grin* but if they stopped, what would I blog about?

    Thanks for stopping by jdubb. I think the whole irony is that I really had no intention of refinancing, and I still don't, but if I thought I could take advantage of the lower interest rate at a local Savings and Loan, I'd move my mortgage from the BIG LENDER to the small, local S&L. I don't trust big banks, and when they're calling me and trying to sell me their product, I trust them even less.

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  6. There are always closing costs which add up to way more than they tell you and that's why they want to do it. They might be losing interest in the long run, but they get the cash up front and that's generally what they need / want. At least in my experience.

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  7. twofroghome - yep, that's more short-term thinking on the bank's part. They could leave well enough alone and just let me pay off the current fixed-rate mortgage I have, which is a guaranteed income for the next twenty-plus years.

    Or, they could take the refinance, get a few thousand dollars right now, and lose $100,000 over the next twenty-plus years.

    I guess spread out over twenty years, a $100,000 loss, for them, isn't as good a deal as getting suckers ... I mean, borrowers ... to refinance and pay them the couple thousand dollars in closing costs ;).

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  8. So here is our horror story. We put our house on the market because of our move. We were told by the state agency we went through that in order to rent our home, we had to have it on the market. Hubby calls the state office last week. He is told at that time that he has to call the bank that takes our money. He calls the bank and is told that if we rent our house we will be foreclosed on even though we have never had a late payment on our mortgage.

    In the mean time, the realtor did a market analysis on our home. her analysis is based on average home price of homes sold in the last 3 years. One of the houses that the analysis is averaged with is our house when we bought it. Another house is a foreclosed abandoned home. The value of our house , according to this average, is 35,000 less than we owe on the loan. When we askour realtor about this she suggests a short sale which will of course prevent us from buying another home for a very long time, if ever.

    So now we have to find an appraiser and see if we can get that number up.

    I keep telling myself that at least we have a home. If nothing else works out with this move we still have a home.

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