I was a happy woman back in September. I'd found a buyer for my New York city apartment, we'd agreed on a price, and we'd both signed the contract. He hired a mortgage broker, and I went about the happy chore of looking for a new home. I found my dream apartment, a beautiful place way uptown on the Hudson River. On the advice of my accountant I withdrew funds from an IRA to make my downpayment. That way, I wouldn't have to sell securities and take capital gains in the same year that I was realizing a big gain on the sale of my old home. I hoped to move by Christmas.
My buyer applied to Chase Home Finance for a conforming mortgage equal to 90% of the purchase price, a financing level my building permits. The approval process took longer than usual, thanks to the credit environment, but on November 14 he received his loan commitment. The next week he passed the board in my building. Meanwhile, my application was accepted in the new building uptown. I arranged a tentative moving date of December 22 and ordered $250 worth of packing boxes and supplies.
Then, on December 3 — the morning after I'd had my own board interview in the new building — my lawyer called. "There's a problem with your buyer's mortgage, " he said. I hadn't been aware that a bank could change its mind after issuing a loan commitment, but that's what Chase did. Someone, somewhere (we'll never know who) decided the bank would lend my buyer only 80% of the purchase price, not 90%, and asked him to come up with another 10%. He didn't have it. So I agreed to finance the difference privately, accepting a promissory note at the closing. Effectively, the bank lowered the proceeds on my sale by 10% overnight. This represented a major financial sacrifice for me. Since I intended to pay cash for my new home, I'd have to borrow from a friend to scrape together the extra money. But I agreed to the arrangement because I wanted the new place so badly.
That wasn't enough for Chase. Having rewritten the terms of the loan, it apparently went back to square one of the entire approval process. Week after week went by, and we couldn't schedule a closing date because the bank needed various documents and confirmations all over again. One day it claimed my buyer's employment verification was missing. The next day it wanted proof he had paid his rent in 2006. My lawyer was at a loss to explain the delay. As December progressed, the deadline for refunding my IRA approached — Christmas Eve. I was due to close on my new apartment on the 30th. It felt like death by a thousand cuts.in fact, I cried more during the month of December than I have since my dad died.
Finally last Friday, my lawyer told me Chase had cleared us to close, and this afternoon we all met at the transfer agent's offices. Everybody showed up except the Chase attorney. He didn't have the closing documents, and he didn't have the funds. We sat there for an hour and a half, and then we all went home. Neither my buyer's lawyer nor his mortgage broker can explain to me, because when they call Chase they can't get an answer.in fact, they never talk to the same person twice. All we know is that a loan that was approved in mid-November is still being withheld without explanation. We have rescheduled for Christmas Eve, but if Chase's track record is any guide, I'm sure the bank will screw us again. My buyer is just as miserable and frustrated as I am. I believe he has been sleeping on friends' couches for a month.
I had to borrow more money from relatives to refund my IRA on time. Meanwhile, the woman who had offered to lend me the extra 10% to purchase my new apartment understandably refuses to send me the money until my sale closes, which means I certainly won't have it in time to buy the new apartment on Dec. 30. The uncertainty over the transactions has also torpedoed my tax planning; if my sale is postponed into I will wind up needlessly paying the IRS tens of thousands of dollars next year.in other words, the financial pain Chase has directly caused me is impossible to exaggerate.
The emotional damage is in a way even worse. I will spend the holiday surrounded by half-packed moving boxes, in tears over the dream apartment I worked so hard to get. Ironically, Chase wrote the mortgage on my current home.in 19 years I never missed a payment. Another irony is that on the bank's mortgage home page, it says it'll get you to close on time or pay you $300.
I will never again use Chase for even the simplest financial need, and as a journalist I intend to publish a full account of this horrible saga in the coming months to warn other innocent people about Chase's unconscionable practices.
Joan
New York, New York
U.S.A.
0 comments