Roger Marolt: Roger This
December 16, 2010
Remember how easy it was to get a home equity line of credit (HELOC) back when we were dumb and banks were dumber? I didn’t until I recently refinanced my mortgage.
It was supposedly a simple thing. Our current and new loans were both with Too Big to Fail Bank, N.A. You would think it could be as straightforward as me asking them nicely for the latest low interest rate on my loan and them saying “fine.” I mean, really, why make an existing customer go through the application process again? What if the new paperwork showed that I was no longer a good credit risk? They’re better off making me stick to the old loan with a higher payment then?
That’s wishful thinking, though. We had to reapply, and for those who don’t know “reapply” in banker speak means “generate paperwork like it grows on trees.” And, as if to prove that paperwork does grow on trees I am certain they cut down several of them for the amount we had to deal with.
Closings are funny things. They are scheduled to take half an hour. Banking experts figure that this is plenty of time for non-bankers to read through the 112 pages of legalese that must be completely understood, signed, dated and notarized. Did I mention that there are numbers on some of them? Sure, take all the time you need, but if we don’t get this finished before lunch you’ll lose your locked-in rate and will have to reapply. Oh yeah, and the next appointment is waiting in the lobby. No pressure.
I don’t know about you, but this approach makes me stubborn. No, I didn’t read every page, but I ran my eyes over them as if I was Evelyn Woods on espresso and then occasionally glared at the closing agent to see if she was getting fidgety about trying to pull something over on me.
I wasn’t comprehending much of it, but I kept perusing, hoping that I at least looked smart doing so. And do you know what? If you take this approach long enough, eventually you might get lucky.
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Just as the pages were beginning to look like old black-and-white television set snow, I spotted a charge that defied me to question it. So many times when you find something like this you hesitate to ask about it because usually the explanation is given with such nonchalance that, even if it’s gibberish and you still don’t understand, you nod your head and say “oh, yes, of course” as if it makes complete sense.
So, I’m waiting for the perfectly logical explanation for an unexplained $375 charge on our closing statement. Low and behold, the closing agent doesn’t know what it is, so we call our representative at Too Big to Fail Bank. She doesn’t know what it is either. Now I’m really onto something. She will have to call us back!
Let me tell you, the wait was worth it … for Too Big to Fail Bank. It turns out that Too Big to Fail Bank was charging us a $375 late charge on an old HELOC. A late fee? What? I’ll admit that more than occasionally I arrive to Sunday mass after the first reading, but I’ve never been late on a mortgage payment. “So what,” you say. Well, how about this: It was a late fee on a $40,000 HELOC we never used, never wanted, never requested, and never even got a statement for. It didn’t show up on our credit reports. We didn’t know it existed! Oh, and by the way, they are charging us $10 to fax over this information about nothing, so now we owe them $385.
I admit that I finally remembered the HELOC from our previous closing nearly eight years ago: Opening it was a requirement of our loan back then. Can you imagine that now? Too Big To Fail Bank made us open a line of credit for $40,000 that we didn’t want. This wasn’t mentioned when we applied for the mortgage. They broke it to us at the closing. When we told them we didn’t want it, they said “fine,” but we would have to reapply for the mortgage and lose our locked-in rate. “OK,” we said, and asked what would happen if we never drew on the HELOC? “Nothing,” they assured us.
Well, apparently 375 bucks was nothing to talk about in the glory days of mortgage lending, but it’s something nowadays. I raised a little hell over this and was promised that it would be taken care of after closing.
“Go ahead and sign so we can keep your rate, and we’ll make sure it gets refunded,” my Too Big to Fail Bank advisor advised.
To date, all I’ve gotten is a pretty “We appreciate your business” card. I’m pretty sure it will be the last one they will ever have to send me. They told me that unless I could prove that Too Big to Fail Bank made a mistake, they couldn’t refund my $375 or the $10 fax fee.
How am I going to prove that? It’s a $375 charge for nothing. For crying out loud, how do you prove to someone that you got nothing that you never asked for from them? So, in the end I was left with only one remedy: I won’t use Too Big to Fail Bank again. Like they care.
So, now I feel like Too Big To Fail Bank punished me for not drawing on that HELOC that I didn’t want. I just can’t figure out their angle. Maybe they are thinking that if they could have pressured more customers into taking out even more loans they couldn’t afford, Too Big to Fail Bank, N.A. would have gotten even more bailout money from the government. Now they’re mad. They have to figure out other ways to raise money for year-end bonuses.
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