this is long, all this happened in 1 week.  let me start from the beginning...

I'm searching for a house so bank A pre-approved me.  I find the house I love.  builder accepts my low ball offer with the condition that we go with their lender and close by the end of the month.  We're already 1 week into the month.  So I start my process with bank B.  all the while I'm looking at rates from all the other lenders.  I ask bank B if they would match rates and fees.  Bank B tells me maybe.  Bank B tells me rates are at 5.375% with no points no origination.  I tell bank B that Bank A is offering me 5% no points no origination.  Bank B tells me no go.  I go back to Builder and tell Builder bank B can't do it.  The difference is about $80 a month for me to go with bank B.  Builder tells me that's fine to go with bank A.  I drop bank B. 

I'm now working with bank A.  I've asked to self escrow.  bank A tells me no problem.  no extra charge.  I'm happy.  a couple of days later Bank A tells me...oops.  you're going to be charged 1/4 of a point for it.  so sad but that's what I'm going to have to do.  your lose.  I'm unhappy but by now it's the end of week and we're suppose to walk the house the beginning of next week and close the week after.  so I proceed with bank A.  paid for my $450 appraisal/application fee. 

today I get an e-mail and a call from bank B saying they'll do the 5% for me.  My loan went through underwriting in 2 days without any conditions, only waiting on home insurance and appraisal.  Bank B is now telling me they'll take my loan and even pay for my $450 that I paid to bank A.  builder is now calling also saying bank B has met all your request...go with bank B because that was part of the agreement. 

I call bank A feeling bad because bank A has done all the paperwork and spent all this time with all my docs and the likes.  I explain the situation.  Bank A is not happy and hangs up on me. 

So why do I feel guilty?  what is the right thing to do?  was what I did wrong? what should I have done?

Please advise...

Oh I forgot to mention that I did like Bank A (before bank A decided to charge me 1/4 of a point for self escrow and hung up on me) and even referred bank A to a friend who also locked in rates and is going to close with bank A when their house is complete. 

This is a tough one, there is no absolute right or wrong here. Here are my thoughts at least:

Paying .25 to waive escrows is required from every lender I've ever seen or worked with. The bank can choose to eat it themselves, (lessens the loan officer's commission, or they have already priced it into the loan) but that wasn't a shady move, just a mistake on the loan officer's part for not mentioning that immediately when you told them you wanted to waive escrows. Whether or not they should have eaten the quarter is probably a judgement call. They were also doing the loan for what was probably a below market interest rate at that time, so there wasn't much wiggle room.

Rates have gone down this week, probably allowing 'bank b' to their meet their profit margins while still offering the 5%. In my opinion, the builder should not be pushing you to use bank b at this point after he already told you that you did not need to. The builder cannot legally require you to use their mortgage co., although if you agreed to it as part of the contract it then becomes a contractual thing.

As for the hanging up, the loan officer was no doubt frustrated after doing all the work on the loan only to get a phone call explaining that they will not be receiving a paycheck. If you put yourself in their shoes I'm sure you can begin to understand the frustration. At the same time, they should NEVER EVER EVER EVER hang up on a client, that's incredibly unprofessional. "Take it like a man" (even if your a lady), then get off the phone and sulk, or vent to a coworker, or whatever you need, but there is no reason to hang up on a business relationship. At the end of the day, every loan officer has lost deals they shouldn't have, and kept deals they should have lost. It's all part of the business, and while it stinks, it is what it is. It's probably not the best thing to have someone do all the work on the loan and then yank it from them, but the fact that they treated you in a pretty unprofessional manner should provide some solace. Give up your guilt, it's not worth it. Besides, at least Bank A still gets your friends loan.

AC

Very well put Antonio. 5 Stars!

thanks Antonio. 

I know if I was in Bank A's shoes I would be mad that's why I felt bad calling him.  But I just felt like it was out of my control since the builder is pushing for Bank B.  I told the builder that I really don't mind going with Bank B but I wish there was a way that I could give the $$ to someone else since I don't feel bank B deserves it.  I also don't feel bank B was looking out for my best interest.  They only offered me the 5% after I told them I would walk and only after rates went down enough for them to offer me that amount. 

Thanks again.  and I do feel better after reading your response.

I think that the builder should stay out of financing. I bet somebody is getting a kick back. He can't tell you where to go to get a loan.

ok...here's an update. 

Friday all this was done.  On Monday AM I get an email from the bank B saying I never said I would pay for the $450 you'll just have to eat that cost.  So I write back bank B saying yes you did.  I asked you 2x and you said not to worry about that.  Bank b claims I "mis-understood" her. 

So now I go back to builder and say crazy bank b said she could do the loan and now she's telling me she can but I'll have to eat bank A's application/survey/committment fee.  so builder tells me.  she'll take care of it.  just move forward with this. 

I email bank B saying builder said  just move forward with the loan.  by this time it's tuesday.  Bank B now tells me.  I can't do the loan because now rates has gone up and I didn't lock you in.  I'm now steaming and $%&# mad.  I tell her to go to someone higher and get it done. 

I'm back on the phone with builder and agent telling my story and telling them how mad I am.  builder tells me to call bank A and go back to him.  I say no...because bank A hung up on me.  Builder calls up bank B tells her to call bank A.  explain the situation and ask if bank A would still do my loan. 

i get an email from bank B saying she called bank A.  Bank A is willing to do my loan for what I was quoted.  Am I suppose to jump for joy?  remember bank A had hung up on me and had told me he can do the loan with no fee for self escrow on GFE but ended up calling me and saying he has to charge me. 

how fustrating.  because I'm not working with some off the wall bank.  I'm working with Bank of America and Preferred Home Mortgage Company (a branch of Wells Fargo Bank). 

I'm now at the point I don't want to deal with either bank and get my earnest $$ back.  Can I do this?

dang you are such a whiner!!!!!!!!!!!!!! You should have stuck with your mortgage company and told the builder you were. The rates are changing daily as you are doing this and your quotes are going to vary according to what the rates are doing.

Just because Bank B had not locked the rate in doesn't mean they couldn't do your loan, unless the higher rate put your DTI (debt to income ratio) over the accepted limit.  If your DTI is still fine with the higher rate, then you're not getting the whole story.  Banks calling another bank to tell them they should do your loan???  Never heard of such a thing, much less a builder being able to talk with a bank about your PERSONAL finances. 

If you've already passed the point of cancelling the deal due to a bad inspection, then the only way you will be able to get your EMD back is if your financing falls through.  If you had started with Bank B, then they need to send you a denial letter if they can't do your loan, and you should then get your money back. 

dang you are such a whiner!!!!!!!!!!!!!!
 
How am I a whiner?  I was with bank A.  Bank B tells me she could do the loan as promised.  this is builder's lender.  builder tells me to go with bank B.  Comes Monday she tells me she can do the loan but she'll have to charge me extra.  so I'm a whiner because I expect not be charged more?
 
Just because Bank B had not locked the rate in doesn't mean they couldn't do your loan
 
bank B could do my loan but she's saying she would have to charge me the rate difference because she failed to lock in my rates on friday when I told her to move forward with the loan.  
 
Banks calling another bank to tell them they should do your loan???  

My thought exactly.  I think bank B knows she messed up and she needs to correct it.  that's why she had to throw everything out the window and ask Bank A to do my loan. 

At this point I don't want to deal with either loan officers.  Is it appropriate to ask to deal with another loan officer at bank A?  I just do not want to deal with someone who had hung up on me. 

I don't blame you for not wanting to work with that person anymore.  If you still want to go through with the deal and are fine with working with that bank, then get in touch with a supervisor over there and ask if you can be assigned to a different LO.  I'm sure they'll be happy to oblige. 

dhn121

Truth be told you are a whiner. You made several mistakes in this transaction and instead of putting on your big boy or girl panties you decided to cry and embarass yourself over a few dollars. That is trully sad.

Simply put you made an agreement, bought a home and bought a loan. Because you had not closed you decided to continue to shop for a better deal. Put yourself in the shoes of any of the people you have dealt with in this transaction. How would you feel. Like it? No you dont. But here you are crying. Again, very sad. 

At the point youd decided to leave bank A who to go with bank B the net difference was $450. Again, I ask you were you being honorable?

Can you go and buy a car at one dealership drive over to another dealership get a deal that is cheaper by a few dollars and go back to the first dealership and return the car? How about go and buy google stock at $400 a share and return it the next day because you can now buy it for $395 a share?

Quit whining! Go into bank A apologize for being a jerk and close your loan... All of this over $450

Right on Steve!!!!!!!!!! Glad everybody is not coddling these buyers.

Right On!  You locked in with Bank A, gave them your deposit, yanked their chain about waiving escrow (I'll bet you didn't mention that at loan app) and bagged out on them after they did all the work.  You contractually agreed to do one thing but kept shopping for a better rate and cried to get out of the contractual agreement with the builder when you found a better rate. 

Where is your integrity??? 

You deserve to close with higher fees and a higher rate.

maybe I was not clear.  I had not bought the loan from bank B.   She had quoted me 5.375% but I knew others were quoting for less.  Bank B told me she has competitive rates.  I started with Bank A thinking I'll close with Bank A.  The builder threw me a curve ball by saying I had to go with their lender.  The difference between bank A 5% rate and bank B's 5.375% rate is a $80 difference a month for me.  that's $960 a year for 30 years.  that's $28800 over the life of the loan. 

When I told Bank B that bank A was able to do the loan with 5% bank B told me should could not do it.  I left left Bank B and locked with Bank A.  I wrote bank B to let Bank B know I was moving forward with bank A. 

Bank A took my application before sending me a pre-approved/pre-qualified letter to make my offer with the builder.   so it was no big deal for him to move forward with my loan.  he just took my $$ and locked in the 5% he quoted me. 

Bank B realized I was not staying with bank B.  That's when bank B told me she was able to do the loan and got the builder to agree with her saying that it was part of our agreement.  and that Bank B is giving me everything I wanted. 

This when everything started to get sticky. 

But that's fine.  I don't have to prove anything to anyone.  I don't feel guilty about this whole thing anymore.  I know I'm in the right.  like I said.  if I was wrong. Bank B would not have called up bank A asking him to take my loan.  why would she?  but because  Bank B messed up.  she had to call Bank A.  if she was right she would have just said...tough. 

Interesting! You are upset because someone made a human error and either failed to tell you of the 0.25 hit for a non-escrowing loan or said something else to you on the phone and was either mistaken or misunderstood. In short, you wanted them to keep not only their word but honor your understanding.

When I take on a client to do the loan, we do so on a contingency basis with no fees up front. We spend time and money to have the loan ready and closed. If it does not close, we get to eat those costs and the time--from the application forward--is wasted and lost. In the process of doing a loan, we always find things represented to us by the borrower to be incorrect. We don't throw a hissy-fit as you did. We just make the correction and continue.

For all of these reasons, it is my policy that if, as a borrower, you have an application with another lender, we will not proceed until that application is withdrawn or cancelled and I have received verification from them that this is so. We don't need the practice, but you need a course in ethics.

You do not honor your word but expect everyone else to back theirs fully. You have, so far, told two lenders to go ahead. They have invested their time and probably some money based on your word.  You will undoubtedly bad mouth which ever lender you do not use, yet you are astonished that those of us who do this for a living find you to be less than honorable.

the builder probably wants him to close quickly. He sounds like the guy that thinks it is a custom built home and checks on the builder twice daily and doesm't have a dime in the property.

Bank B called Bank A to ask them to take you back because the builder pressured them to do so less he lose a sale and Bank B values his business, not yours.

So I think all the mortgage professionals are being a little too hard on this guy.  Most borrowers do not understand the work we LOs put into their file.  They also do not understand we are limited on rates by the rates sheets our "banks" send us. 

That being said, I understand the frustration of Bank A in losing the loan, then getting it back, happened to me a few times.  The last one lost me over $10,000.  That's the breaks we take.

So the solution to all this is simply, get all the good faith estimates BEFORE you sign with one officer.  Even if hidden costs come up, don't look everywhere else UNLESS you know they are purposely jacking you around.  We are humans too and sometimes we overlook certain things.   

Joe MacKay:

Hey, idiot!

I would never call a borrower/customer an "idiot" - even if I thought they were, and even if they weren't my customer.  Take out your frustration somewhere else, not this site.

Wow--- here I thought I was the only cranky bast@#d out there! Nice work MacKay---smooth.