File Drama

I just finished up doing a loan for a lady who probably didn't "deserve" to be able to buy a place. It is one I'm going to wonder about for years. I'm going to wonder if I've done the right thing. I'm going to wonder if she'll be able to afford the mortgage, property taxes and all the other expenses that go along with owning a home. At the same time, she is now among the landed classes, something that with equity growth, could secure her future forever. She makes $20/hr, and she owns her own home, something that would normally be unheard of in the Bay Area. Well, in a way, we own her home, as she received 100% financing. The sellers contributed $12000 from the sales price to cover the closing costs. She had a thousand dollar deposit, and was expected to come to the table with about another thousand. If you've got two grand and can buy a $315,000 condo, you've got a great loan officer.

I didn't "state" her income higher than it actually was. I didn't gouge her on the rate (not that I could). It was a good loan, using full documentation, on a relatively inexpensive property. My concern is that she faught me and her realtor every step of the way while we were trying to do something for her. She would send me bank statements with the account numbers whited out. Every document I asked for (and there are lots needed when asking for a mortgage) was greeted with, "Why do you need that? I don't think you need that". I'm sure there was no fraud here; I did get everything I was asking for eventually, it was just her attitude. I was helping her fulfill the American Dream, and she acted like I was forcing her to do so. Two days ago, she went to her final signing, but she needed another $1400 in a cashier's check. She didn't bring it. They let her sign anyway, but they won't record with the county until that money is received. Yesterday, I got a call.

"Gil, I don't think I can go through with this loan," she said.

"What? Why not?" My stomach churned. I had put hours and hours of work in with this lady, going back to the beginning of August. I saw it falling apart, but in a way, I was almost grateful. I imagine a marathon runner is relieved at that exact moment he collapases, unable to continue, within sight of the finish line. The runner will regret it later, but at the moment, there is relief.

"They took my car."

"Who took your car?"

"The car lot. I fell behind on my payments so I could have this money for a down payment, and now they took my car. I need the money to get the car back."

"Wow." I was shocked. I didn't know what to say, but once again, she was being wishy washy.
Mind you, I had already beat up my boss twice to get pricing concessions on this loan so that she could come to the table with almost nothing. There was no room to budge. Heck, the loan had already funded; we were just waiting to record. Still, in my short time as a loan officer, I've never had anyone try to back out of a purchase after they've signed docs. I didn't know if she even could back out at this point. I told her I would check on her options and call her back. After talking to the experts at my office, I learned that obviously, we can't force her to come up with the relatively small down payment. If she never paid it, the transfer would never record, and everything would just rescind.

My phone rang. It was her realtor. Of course, the realtor was panicing. She said she had heard a message from the buyer, stating what had happened, but all her attempts to call her back had not been answered. From what she'd shared, our buyer had the same distant, cold relationship with the realtor as she had with me. Even then, the realtor offered to loan the buyer the money to close the deal so she could get her car back. The realtor asked me if I thought she was doing the right thing. She asking me? At this point, all my doubts about my buyer's ability to handle this place came to a head, and I said "no". I told the realtor, that no, I wouldn't do it, but I am not her. She needs to decide whether to risk her own funds on this lady. At the same time, I recognized that this was a once in a lifetime opportunity for the buyer, and she shouldn't back out thinking she could get this deal again sometime in the future. She barely qualified for this place as it was, and although the skyrocketing ascent of property values here in California have leveled off a bit, there is no way she'd ever be able to find a condo at this price again, particularly considering the great loan I put together for her and the concessions being made by the seller. Furthermore, although I couldn't share the specifics of her credit report with the realtor, I knew that once this repossession of her car hit the credit bureaus, it would be years and years before her already marginal credit would have recovered to the point where a lender would even consider doing a loan. All this, and the buyer wouldn't return the realtors calls.

After hours of pleading voice messages from both of us, the buyer finally agreed to let the realtor do her the favor. I told her the cold hard facts outlined above. The realtor used a different strategy. She told the buyer that if God puts someone in your life who is willing to help you, one needs to recognize that and not refuse the help. I will let the cynics come to their own conclusion about that, but as a theological determinist, I would agree with that statement in principal. My only question is are we really helping this lady?