A couple of months ago, my wife and I found a house that we really liked – nice neighborhood, close to our daughter’s school and so on. So we decided to put an offer and see if we could get that house.
Lets start with the loan application.
We had enough savings to put a downpayment . I have an extremely good credit score and fairly low Debt to income ratio. I have also had my checking, savings and credit card at the same bank for many years. I even had my past mortgage and line of credit with them . The bank would know everything that happens in my life – after all I have been in their top tier of loyalty program . I generally expected to walk into the bank’s office , sign some docs, share my tax info and W2 etc, and expected a loan to get funded in a few weeks .
I also wanted to take a home equity line of credit from the same bank and filed an online application for that .
Guess what – turns out , my bank doesn’t know anything about me . My line of credit application went into a black hole . Few weeks later , I called them and forced them to work on it . 90% of information they collected from me are things they readily have with them but didn’t seem to have access to !
The end of this process was even more weird . They sent me a letter saying I asked for $X and it is denied because my house appraised at a value that is slightly (by few thousand dollars ) lower than what’s needed for the line of credit . So rather than offer me a slightly lower credit line , they just denied it . So much for all the top loyalty tier and time spent on it . I am still shaking my head on that . Absolutely bizarre !
The actual loan application didn’t fare much better . And finally they came back with a loan that cost me more than what internet lenders offered . Plus they needed several more weeks to close than others .
Cut to the chase – I went with another lender who offered a better rate and faster time to close . My bank just lost my business – they tried really hard to not win it .
In hindsight , I should not have been surprised at all . A trained monkey looking at my checking account statements would know when my car lease would end . My bank was never once able to use that information to offer me a car loan . This doesn’t need complicated analysis – it’s just stupid . Clearly, you can’t fix stupid .
My lender wanted to get a HELOC note for a line of credit I had paid off and closed in past. I went to the bank only to be given a toll free number . After speaking to multiple people , I found a helpful lady who found the note for me . However she only had two options to send it to me – regular mail or fax . Email apparently is still alien technology for them. I had to call my wife to hook up a fax machine and get the document . My neck hurt from all the shaking .
So yesterday I went to the bank to get a cashiers check for the down payment . I used my debit card – which has my photo – to take the money out of my account . The teller then exclaims she cannot verify my signature because I had opened that particular account online without a paper form showing my signature . My debit card PIN and my photo on it , and the signature on my drivers license didn’t count . She had to get her manager , make me sign more paper before they could get me a cashiers check . Easily an hour lost for me , and three employees at the bank . I now have a bald patch on my head thanks to scratching my head since then till now .
So that was the bank . Let’s move on to the actual paper work after the loan is secured. Barely 20% of the documents can be electronically signed . Rest needs trees killed and ink spread on paper . Emperically – redundant information to be filled by the title company is probably around 50% across all the forms I had to sign . Chances of making errors are everywhere , let alone the sheer time needed to fill all those forms . Even if “digital” can be ignored , why not at least streamline the paper forms ?
A company like DocuSign can single handedly disrupt this terrible manual process and bring it to 2016 digital standards . They will have the gratitude of home buyers and sellers across the country – and their money !
These are not insurmountable problems even by technology capabilities of a few years ago – which is why I am all the more annoyed with this . I am not calling out the bank by name – but I am going to find the CEO’s email id and send this information . And then I will wait by my fax machine to hear if he can do something about it .