Home Improvement Financing Hell

by Ben Goldfarb on April 21, 2014

in General, Home Improvement Hell

Siding Job Progress

Now, we’re cooking. Actual siding being cut and installed.

Day Nine of the siding project is a Monday. Easter Monday. Many people take off from work, but not my construction guys.

These guys are punctual to a fault. I could set a clock by them. In fact, they’re my alarm clock.

Another insistent knock on the door at 6:55 am – they ain’t got no power. This time, it wasn’t a circuit breaker, it was a GFI – still a pain in the ass. In his infinite wisdom and/or cheapness, the builder of this house saw fit to locate GFI outlets inside that would trip when there were ground faults with stuff connected to regular outside outlets. On the particular circuit that went dead this morning, there is a GFI outlet in the garage that affects the upstairs master bathroom, garage outlets, and an exterior outlet around the corner from the garage. All this on a single 15 amp circuit. I had mentioned in another article in this series that another 15 amp circuit incorporates the downstairs bathroom’s outlet plus exterior outlets at the front and back of the house. The GFI is in the bathroom.

Re-wiring the house is not a project I feel like taking on at the moment, although it is a possibility in the future, especially because of my FPE load center.

However, the job is taking shape. Some siding is actually up and after today there will be more. The siding material is coated with yellow primer. I actually prefer the yellow to the color approved by my HOA, but that ain’t gonna happen, so I can get that out of my head right this instant.

Today, I get to see the big mahoff from the remodeling company, or at least the estimator/salesman/collection agent. He’ll be wanting another 1/3 installment. So, that leads into my topic of the day: Home Improvement Financing Hell.

Poundage

Back in early February I applied for a home improvement loan in anticipation of this siding project and a roofing project to be scheduled later. While I could cover the costs of these projects without borrowing, I figured that the stuff I was doing would last longer than this old geezer, so why should I pay for stuff I’m not going to use up? After I die, I don’t care who pays for it.

So, the natural thing was to apply for a loan at the bank where I do my business. I have a couple of checking accounts and a safe deposit box at a local branch of Fifth Third Bank, a Cincinnati outfit that seems confused about its cardinality. I thought there would be synergy, in that a lot of my income is directly deposited into the checking account there.

I applied on-line and was quickly approved subject to providing required documentation, which I thought would be a formality, but it turned out to be anything but!

Two years’ federal income tax returns were only the beginning. My damn tax return is typically thirty pages long. Once they saw that I had income from a Subchapter S corporation, they wanted the corporation returns, too. More poundage.

Of course, they had to do an appraisal on the house, as indeed this was an application for a home equity line of credit. The appraisal came back with a ridiculously low number, about $40,000 less than the tax assessment value. In any case, I wasn’t very concerned, inasmuch as the amount of the line I was seeking was only 20% of their puny, undervalued appraisal and I had no other encumbrances on the house.

They seemed to want proof of exact amounts of projected income. That’s hardly possible because it is based on market conditions, interest rates, and so forth. I told them that several times, but you would think that people in the banking business would comprehend that simple notion. Perhaps my CPA was right when he said that if you’re a retired geezer and don’t have a W-2, the banks don’t want to loan you money. This is somewhat unfathomable, inasmuch as a W-2 provides them no guarantee of a continuing income stream, just income from employment in the previous calendar year. I have a couple of trust funds that will provide income for life, and I gave Fifth Turd letters from trust officers confirming that fact, but they wanted exact amounts.

In the end, they had stuck their tentacles into all areas of my financial affairs while costing me over $30 at FedEx Office for copying stuff and $11 at the post office. Surely at this point, I thought, they would have what they needed to grant me final approval. I was wrong.

Incomplete Application?

One day, well over a month into the application process and with much poundage having been generated for the underwriting bozos in Cincinnati, I received a computer generated letter from a senior vice president of Fifth Turd, stating that my application was declined. The two reasons given were: 1) insufficient income to meet obligations, and 2) incomplete application.

The second reason, “incomplete application”, was completely laughable! I sent them everything they requested and more! WTF??

The first was similarly puzzling. I have no mortgage, no other loans, and no consumer debt. I pay credit cards on a 30-day basis. I have done so for years and my credit score reflects it. It has been over 800 for many years. The small home equity line I was seeking would not be a strain on my finances by any stretch of the imagination. So, again, WTF??

Contrast

As I was grousing over the turn-down, Artificially Sweetened suggested that I go to SunTrust, a bank I had dealt with before I got pissed off at them and moved my money to Fifth Turd. Their nickel and dime fees every time I turned around had driven me up a wall, and their minimum balance requirements to waive the fees was waaaaaaaaay too high ($25,000 average in checking account and $50,000 in all accounts). I found that Fifth Turd didn’t charge for many of the things SunTrust charged me for, and the average balance to waive maintenance charges was only $1,500. So, I said sayonara to SunTrust about seven years ago.

Now, I would ask them to lend me money. This ought to be good, I thought.

I was anticipating a similar process to Fifth Turd, but it was like night and day. I made an appointment with a loan officer at the local branch (which is about 500 feet from the Fifth Turd branch). I spent a half-hour with her and had to sign only a single piece of paper — the IRS Form 4560-T that authorizes them to obtain tax records. The loan officer typed all my income information and so forth into the computer while I sat there.

She also did a quickie appraisal, which turned out to be fully $100,000 greater than Fifth Turd’s appraisal. I asked how much I could borrow against that, and the number was 80%. I wouldn’t need anywhere near that much.

She told me she would need the declaration page from my homeowner’s insurance policy, which turned out to be the only copy I had to make for SunTrust. A contrast to say the least — at least with respect to copying. The proof, however, would be in the proverbial pudding. I still had no W-2, so could my CPA still be right?

The following day, I got a call from an underwriting officer in another city for the purpose of reviewing my application and providing a few needed details. Very polite, and very efficiently done. He said that preliminary approval had been given, but of course, I had heard that before from Fifth Turd. After two more days, I got a call saying that the final approval had been given, and I could schedule the closing with the loan officer at the local branch, whom I’ll call Carmen, because that’s her name.

There were no catches. I signed a bunch of stuff and within four more days, I had a check in hand for the full amount of the loan. The application and information gathering process had been painless, and less than two weeks time had elapsed from initial appointment to money in my pocket.

SunTrust has my loan business, but they won’t get my checking account. Their fees still suck.

The moral of the story is that if one bank turns you down, try the bank across the street. They don’t all do business the same way.

Strongly Worded Letter

I thought that the Fifth Turd “senior vice president” whose computerized signature appeared on my denial letter deserved some shit from me, so I wrote a strongly worded letter pretty much stating the same thing as I wrote above, with an explicit question about the real reason I was declined. I reasoned that it couldn’t have been an incomplete application because I gave them everything they wanted. It couldn’t have been the insufficient income to meet obligations thing because I have no obligations. It couldn’t have been a bad credit rating because my credit score was over 800. What the hell was the real reason? Here’s my closing paragraph:

I know that each bank has its own criteria for approving loans, but in summation it seems that Fifth Third’s are particularly tight. How many people with a credit score of 801 do you turn down? I feel as if either your employees dropped the ball on this one, or I was declined for some tangential political reason. Would you mind giving me the real reason?

Predictably, I have received no response to that letter, which was dated April 10. It is probably residing at the same Cincinnati landfill as my application and associated poundage.

Back to Work

Day Nine Progress

Siding and sheet metal in process.

These guys are moving pretty quickly now. I’m thinking that they should be able to finish nailing up the siding and taking care of some of the other wood rot issues this week. Painting and gutters/downspouts will follow. As I previously mentioned, I actually like the natural yellow primer color of the Hardie siding (see photo), but I can’t keep it that way, thanks to HOA covenants and restrictions. We’re all “earth tones” around here. In other words, shades of brown. I’m glad I have some red brick to break up the brownage.

And now, I sit here in the resonant chamber, with walls vibrating to the extent that pictures fall off the interior walls, and the globe lights in my bathroom vanity fixture vibrated loose. A couple of them burned out, too, because they weren’t designed for rough duty. Perhaps I should replace them with garage door opener bulbs for the duration of this project.

I’ll be back soon when I have more home improvement hell to complain about!

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