Try this analogy on for size.
You board a full airplane and it taxis out onto the apron of a crowded runway in the midst of strong winds.
There you sit. A half-hour passes, and the pilot remembers you guys are in the cabin. He announces he is awaiting clearance for takeoff. Another hour passes and you get the feeling this plane is going nowhere.
Add a wrinkle
Then another announcement is made, this time by the lowest-paid airline employee on the plane, the flight attendant. She informs you that the airline needs more background information from you if you are going to fly on this plane at all. She will be handing out a detailed checklist for you to complete as you sit there longer, wondering whether you are going anywhere.
I probably shouldn’t be writing about this issue – which actually has nothing to do with airlines – because the focus of this blog is on how new communication technologies are impacting our everyday lives.
I probably shouldn’t be writing about how today’s large banks are putting home loan applicants into the same scenario as the airline above.
I probably shouldn’t be writing it, but I will anyway.
The tech connection
There is a link to this blog’s focus, after all. The same technology that gives us the ability to communicate in a virtual world, makes it easier for bankers — many of whom are behaving in strange ways toward their customers – to isolate themselves from us.
If a banker wants to treat a home applicant as more of a threat or nuisance than a customer, it’s much easier to do that if that customer will never be able confront that banker face to face. The bank will simply delegate a low-echelon loan processor to deal with the exasperated applicants.
And even that exchange will likely happen via e-mail or text.
Of course, that loan processor has no power to solve the problem frustrating the customer, and it wasn’t his or her decision to treat the customer with such disdain in the first place.
This all may sound abstract to anyone who hasn’t applied for a home mortgage recently. But to those who have – especially those who have nasty memories of last-minute conditions the bank layers on — these thoughts need no clarification.
A personal saga
My wife and I applied last February for a mortgage on a home under construction in a 120-home development in Southern California. We were told by the builder – a national company – that we should use their preferred lender if we wanted to get an extra incentive being offered.
The lender is also a national bank (I’m tempted to say it goes by B of A, but why get personal). It was represented by a helpful loan originator who later disappeared from the bank. Why have customer-oriented people working for you?
I was now told to deal by e-mail, text, phone, and e-fax with a loan processor 1,500 miles away in Plano, Texas.
All through the four-month process, as the home went up, we were assured that our loan would sail through.
Then came the week from hell.
That was, of course, the week before closing. That’s when the bank turned seriously anal and wanted quick responses to a laundry list of some 26 detailed queries requiring research tantamount to a master’s thesis. A half-dozen of these came the night before close of escrow. That was last night. Another two came this morning.
Years ago when I entered the Navy, I underwent an FBI background check. That was child’s play compared to what B of A (oops, wasn’t going to use it again) has put me through in scouring my past just to approve a mortgage for which I am well-qualified.
Part of the problem is the banks must get approval from their auditors and, to be sure, some tightening in the underwriting practices have been overdue. But now the pendulum has swung 180 degrees to where even qualified lenders are having trouble getting home loans.
I suppose, to bank executives, the mental torture they dispense falls under the heading of “tightening our risk-management position.”
To the home applicant, it simply reeks of having to prove our integrity to the bankers whose own integrity has been a matter of discussion for some time. Let’s see now, wasn’t it the banks’ wrong-headed loan practices that took us into this housing mess in the first place?
Plan for time off
If you are planning on applying for a home loan through a bank, consider taking a week’s vacation during the week before closing. You’ll need it to assemble all the last-minute paperwork the bank will require.
In my own case, it amounted to collecting more than 100 pages of documents from various sources and faxing them – sometimes twice – to the beleaguered loan processor working overtime down in Plano. And that doesn’t count the 60 pages submitted to the bank earlier in the process.
The banks will not tell you this when you apply, but be prepared to document the source of every single deposit – no matter how small – made to any of your bank accounts. That time period ranges from two months before you even take out the loan, right down to the day of closing.
As I write this, today is supposed to be our day to close escrow. But this morning I still do not know for certain whether I even have the mortgage, which the bank has said, for months, is “looking fine.” BTW, the last thing they did — an hour ago — was to confuse my wife’s W2 form with mine and wondered why my income had changed.
Meanwhile, I look down what should be our new street and see the 19 other homes that have just been built. Half of the homes were supposed to have closed escrow earlier this month, and the rest by next week. Yet only one home is occupied, and closing has occurred on only three others.
So my wife and I know we are not alone in our frustrations. We’ve heard enough stories to know this is happening to nearly everyone who is buying in this housing development. And if it’s happening here, it’s happening elsewhere.
Probably all over the country.
Life has changed
The same technology that has brought us closer together with long-lost friends via Facebook, has also added to the impersonality of our country’s banks. Nothing is done face-to-face anymore, and the ability to strike a deal – and seal it – with a local banker is gone forever.
Numbers and algorithms have replaced names, faces and relationships in today’s self-serving corporate world as the fortress walls are reinforced with more concrete. Customers become potential threats. Barbarians at the gate.
No scoop here
Meanwhile, The New York Times reported yesterday that Bank of America and several other large banks are in trouble, and that their credit rating has been down rated by Moody’s Investor Service.
To a frustrated banking customer, no surprise there.
New communication technologies do create some problems. Two years ago, in the midst of applying for an earlier mortgage, I was suddenly declared dead by Capital One, a premature assessment to say the least. It took me a month to convince the Capital One computer I was alive. Only then was my credit history unlocked so I could close on that mortgage.
I was actually told by a Capital One officer, “I believe you are alive, but our computer thinks you’re dead, and it has 30 days to update its file.”
No progress here
This time it’s another headache, and the technology again doesn’t help in face-to-face contact with the lender.It only add to the ability of the lenders to isolate themselves from the customers who are frustrated – and frankly offended – by their way of conducting business.
I feel for that loan processor down in Plano. The grief she is getting should be going upstairs where it belongs.