Tuesday, December 7, 2010

BANKS - PART OF THE ECONOMIC SOLUTION OR THE ECONOMIC PROBLEM

I hope Thanksgiving was pleasant for everyone and under the circumstances most of us had much for which to be thankful. In my first letter I briefly described our 14 hour journey north and as you know we made it. We have been kept busy throughout November with the arrival of our furniture, buying some appliances, getting phone, TV and internet set up and fencing part of the property. Surprisingly, with few exceptions all service personnel and deliveries have been made in a timely and courteous manner. The pace, if not the residents of Bainbridge, seem to be less rushed and more civil and easy going. Our Thanksgiving was reminiscent of Thanksgivings on Kings Mountain. We were joined by our son, Devin, and friends Ralph and Mary Miller. We experienced some of the coldest weather to hit Bainbridge in years complete with a snowstorm and a 36 hour power outage. We felt right at home!

As many of you know the sale of our Kings Mountain house took two years. If it had not been for the diligence and hard work of our real estate agent, Margot Lockwood, we might still be residing in California. Of course the state of the economy and the current housing market meant a sale yielding somewhat less than what we planned in 2008. As a result a modest mortgage was needed to purchase our second home on Bainbridge. Yes, we already own a home in the Rolling Bay area of the island; but after being a rental for five years it would need quite a bit of work to bring it up to our standards. Consequently we decided that rather than embark on a long remodel program we would find a house in move in or turnkey condition. We found such a house in the Lynwood Center area of the island. A charming craftsman style house on 2.5 acres surrounded by trees with a salmon stream running through the property.

However; there was a gorilla in the room when it came to putting together the sale of the Kings Mountain house and the purchase of the Bainbridge house. That gorilla was the bank or more specifically the bank's underwriters. We used the services of a Seattle area mortgage broker and were prequalified for our loan. Skyline was sold and our buyer, who is more than financially qualified, was given the third degree by the Wells Fargo underwriters. The documentation and paper work he was forced to provide was endless. Then it was our turn. In spite of being prequalified our lender began making demands for documents, statements and letters of explanation that continued right up until close of escrow. Having no consumer debt except an interest free car loan, credit scores of 790,795 and 800, money in the bank and more than sufficient income the underwriters demanded more proof of our credit worthiness and intentions.

Our lender demanded proof of earnings for my last two years of teaching even though I retired in 2008. We had to provided letters stating that we intended to live in the Lynwood house as husband and wife (I added until death do us part) and explain why we were selling an expensive house in California and buying a less expensive house in Washington. In this letter I gave a crash course on the CA economy, empty nest situation, retirement and downsizing. Most of these letters required editing and rewriting to control my sarcasm and tongue in cheek humor. Without a doubt the underwriters are the most annoying, persnickety, supercilious bunch of anal retentive nit pickers I have ever encountered. No wonder the housing market is in a slump.

To anyone contemplating a sale or applying for a mortgage prepare yourself for an ordeal. Having bailed out the banks with our tax money it is ironic that we are now treated as their problem rather than the funding source that provided a solution to their financial difficulties. They were too big to fail and we are too little to matter.

No comments: