People often ask me why someone with no current debt problems needs asset protection planning. One of the principal reasons is because most people will sometime have to deal with lenders who are both arrogant, condescending, and impossible to deal with. One of my clients recently related his experience with a local mortgage lender called FBC Mortgage of Orlando which serves an example of how oppressive some lenders can be and how poorly they can treat customers.
The client told me he was helping his daughter get a home mortgage by guaranteeing the mortgage loan. The mortgage and house purchase had to close before the end of the month or the mortgage rate would go up a quarter percent. Closing had been scheduled for July 25, but the seller needed a delay at the last minute so it was rescheduled to July 30. You would think the mortgage lender would have had the loan ready on the original closing date. My client stated that several emails were sent stating that the borrowers, the client, and his daughter stating that they were approved and that the lender had everything it needed . My client says that these written assurancest turned out not to be true.
In fact, according to my client, FBC Mortgage most likely did not submit the loan to underwriting until July 29, the day before closing. During the final 24 hours the lender requested a large number of additional documents. As each set of documents was submitted, or resusubmitted, the lender required more and more documents- all within 24 hours of closing and mortgage rate deadline.
Each document request was blamed on “the underwriter.” Can we speak with the underwriter to find out why the documents are needed or to explain things? “No.” Most of my clients tell me that they never can speak with “an underwriter.” Have any reader ever spoken to “an underwriter” or met anyone on “a loan committee?
My client assures me that he can write pages about the FBC Mortgage’s incompetence and unprofessional conduct in processing his mortgage loan. His worst experience was when the “underwriter” demand that the client file personal tax returns which were not due until August 15 pursuant to an extension. The client had been waiting for an explanation from his CPA before filing the return. The client states that 1 PM the day before closing and rate increase deadline the “underwriter” at FBC Mortgage demanded that the client file his personal and business returns in no more than one hour, by 2 PM, and that the client file at an IRS office, and that the returns be faxed to the underwriter with an IRS receipt for filing. Underwriting did not approve of the IRS’s August 15 extension.
That the mortgage lender apparently waited until 24 hours prior to closing to submit the client’s loan for approval illustrates, in my opinion, incompetence, disdain for the borrower, and their enjoyment of their power over people who they believe need their “approval.” . Understand, that this client had bank statement that proved he could buy the house for cash and did not really need their money. You would think, given all the foreclosures and deficiencies, that a mortgage lender would be solicitous of this business.
Although the client’s experience with FBC may be unusually poor, the story illustrates the type of people at mortgage lenders the public has to deal with to obtain and administer normal consumer loan transactions. You cannot assume that your lender is going to be fair, reasonable, or treat you with respect. When dealing with any lender one should prepare for the worst case scenario and protect your assets in advance.
Page last updated on May 22, 2020