Politics, Recession, and Lending Climate

[Anonymous]

Today I got a call from my loan officer.... 'Very urgent... USDA is ending the Guaranteed Rural Housing program, and we have only until 5pm to submit your application.'

I drove two hours to meet in person and sign paperwork.  On the way there, I spoke to a firnd who's a financial journalist, and to my financial advisor who stays up on politics, as well as to the competitor lending officer.

In general, from these three sources I was able to piece together that 1)Wells Fargo hasn't gotten the same TARP treatment as other banks (forced to take money even when it was declined, not allowed to pay back early), and 2)that Wells Fargo doesn't have the greatest ratings, and may not be taking on more loans at this point, and 3) that the press release from USDA actually says funds will likely run out by end of April.

So with all this pieced together, I just shelled out for the appraisal on a loan that I feel somewhat skeptical about.  My inital application came back as 'referred.'  I guess I'm not surprised, as my credit history not intergallactically stellar.

Does anyone have a take on the lending climate, either in general, or specific to Wells Fargo?  From other hot posts regarding WF I'm feeling a little shaky, and of course the clock is always ticking!

Thanks

[ShanetheMortgageMan]

Your application had to be in by a certain time before Wells Fargo cut them off, basically Wells Fargo is just being cautious about leading customers on to believe they'll be able to get a USDA mortgage through them if they are unable to secure a conditional commitment when it comes time to.  Basically they are making the call to rather than explain why their customer just went through the entire process, and qualified for the program just fine, but because government funding ran out they must delay the close of escrow until an undetermined time... just not put themselves in that situation the first place.  Now could they have extended their deadline and be OK?  Probably, but not the kind of risk they are willing to take apparently.  Wells Fargo does do USDA lending a little differently than most lenders, and getting a "refer" doesn't necessarily mean that you won't get approved, but since you've made their deadline and things are progressing, just sit tight, don't stress out, and wait for the appraisal to come back and everything reviewed by underwriting.

[Anonymous]

This morning my mortgage man called to tell me he didn't think my application would go through underwriting, be appraised and written up by the friday morning deadline.  In fact, as of 6pm tonight, he hadn't bothered to order an appraisal.

Is it a conincidence that he's also out of town for the week?

I also did a little more research, and while WF rates were looking pretty good, there are some comparable rates out there at other places.

The whole process of mortgage shopping is leaving me a little pessimistic.  How do I know that they're really working ot get me the best rates, to qualify me for a government program, or get the applictions done in the timeliest manner possible?  It's blind faith in the mortgage man.

Look where that got everyone on Wall Street

[ShanetheMortgageMan]

There has only been 3 important dates Wells Fargo has announced with the USDA program:

1.  Friday, March 12 - loan needs to be registered (simple process that requires inputing information into a screen and hit the "register" button)

2. Friday, March 19 - all USDA loans need to have their rates locked (you and the loan officer coordinate this)

3. Friday, April 9 - all USDA loans need to be closed/funded (this is the conditional commitment back from USDA, final docs draw, signed, and funds arriving at the title company, so give yourself at least 5 days from when you are supposed to hear back from the USDA office until the closing/funding date)

[Anonymous]

So how does this equate to what happened to me today?  It's lunchtime and I am literally out the garage door back to work, phone rings in garage, it's the bank on caller ID so I pick it up.  It's a WF local banker offering to refi my 6 year old 15 yr mortgage at a lower %, no reappraisals, closing fees, costs, nothing, verbally over the phone, basically just a do over at a lower rate, according to her.  I'm late to work now so I give a verbal OK to pull credit and and lock rate.  I've got a HELOC too and she said "we just subrogate it, nothing changes".  I inferred over the phone that time was critical here.  She said that the paperwork would be forthcoming and all wife & I would need to do inside the next two weeks was go to the bank and get signatures notarized on some papers at the branch. Now I'm right in the middle of some aggressive Credit Card paydowns to try to improve my credit score and get rid of the CC monsters after the CARD act has kicked in and all the dirty tricks the banks have pulled in CC land lately.  I've sent out a lot of $$ lately but it;s too soon for the reporting to have caught up with the actions yet so I know that wasn't the reason, I told her I'd just paid off $27K to zero out 2 WF cards the week before but she wasn't aware of that, so that wouldn't have any bearing on this to trigger this offer at all, as a matter she had to physically run upstairs to get the number of my HELOC, so she wasn't that well connected electronically.  Mortgage modification or refi was the farthest thing from my mind yesterday so I am not up on what is going on right now with the banks on mortgages.  So I have to ask what is in it for Wells Fargo to do this kind of thing without being asked, is there some kind of program quota or something going on out there?

[Lel]

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@Anonymous wrote:

So how does this equate to what happened to me today?  It's lunchtime and I am literally out the garage door back to work, phone rings in garage, it's the bank on caller ID so I pick it up.  It's a WF local banker offering to refi my 6 year old 15 yr mortgage at a lower %, no reappraisals, closing fees, costs, nothing, verbally over the phone, basically just a do over at a lower rate, according to her.  I'm late to work now so I give a verbal OK to pull credit and and lock rate.  I've got a HELOC too and she said "we just subrogate it, nothing changes".  I inferred over the phone that time was critical here.  She said that the paperwork would be forthcoming and all wife & I would need to do inside the next two weeks was go to the bank and get signatures notarized on some papers at the branch. Now I'm right in the middle of some aggressive Credit Card paydowns to try to improve my credit score and get rid of the CC monsters after the CARD act has kicked in and all the dirty tricks the banks have pulled in CC land lately.  I've sent out a lot of $$ lately but it;s too soon for the reporting to have caught up with the actions yet so I know that wasn't the reason, I told her I'd just paid off $27K to zero out 2 WF cards the week before but she wasn't aware of that, so that wouldn't have any bearing on this to trigger this offer at all, as a matter she had to physically run upstairs to get the number of my HELOC, so she wasn't that well connected electronically.  Mortgage modification or refi was the farthest thing from my mind yesterday so I am not up on what is going on right now with the banks on mortgages.  So I have to ask what is in it for Wells Fargo to do this kind of thing without being asked, is there some kind of program quota or something going on out there?

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So it sounds like you got cold-called by a mortgage loan officer trying to get your to refinance.  These are similar to the solicitations that I get in the mail from companies asking me to refinance with them, but this happens to come your current lender.  Recently there was a thread that described the same thing happening to a Chase customer, I believe.

I'd be suspicious of any such call, even if it came from my current lender.  I suspect that the loan officer was just trying to generate business for herself.  She made an awful lot of promises without knowing your credit score or history.

The HELOC is with WF as well?

[Anonymous]

OK thanks for the heads up, I can always decline the offer, as I said this wasn't anywhere on my radar screen at all and I'm not actively seeking more credit right now beyond cleaning up high rate longstanding CC balances and getting a card with a % rate reasonable for the times to recoup my CL's after the Feb. CARD act kicked in.  I was not eager to jump through all the hoops they ask you to when you WANT to refi your home.

In regards the question in your reply - Yes the HELOC is also with WF