My wife and I were referred to Eagle Bank and Trust by our first real estate agent and we were given the name of Brenda Wooten as the contact at the bank. After speaking with her and submitting the required documents we were approved in October to purchase a home in SE Missouri. At that time a exact home was not identified as we were still shopping. At one point we did locate a home but was unable to come to terms during the contract offers. We continued our search until we located another home that fit our needs and our budget, the one we purchased. We renewed this approval in February and July as required. We submitted w-2's, pay stubs etc as required/requested. At the time of the original approval the bank had not identified a loan program that best fit our needs. It was suggested by Brenda Wooten in early 2008 and brought to our attention at that time that the USDA Rural Development Program was available, which is 100% financing. Our target city and county met those USDA requirements and was considered rural. They also verified my income through the w-2's and pay stubs and indicated that we met the requirements of the USDA guidelines through their calculations or assumptions. Since there were also income limits as part of this program, that also needed to be verified. Eagle Bank even went as far as deducting certain expenses that the USDA allows. Even though Brenda did indicate to us that we were close in the limits of income, she did indicate that we were still under those amounts required and did qualify per her calculations. It is obvious now that Eagle Bank did not actually seek this "guarantee funding" through the USDA until approximitely 3 days before our August 22 closing. You would think that if a program has certain guidelines to follow and one of them being "income related" a bank or mortgage company would go through their checklist of requirements needed to rule in favor of or rule in favor against, whether one qualifies for that program. Those verifications do not have to wait until a family identifies a specific home to purchase. We did find a home that satisfied our needs and began negotiations. Eagle Bank was notified on the morning of closing (Aug. 22), that's right the morning of closing that the USDA would "NOT" guarantee funding for our USDA Rural Development Loan. I guess when you submit the paperwork 3 days before closing and this is the biggest piece of the puzzle that needs the approval and it's first time they have seen our paperwork, there isn't a whole of room for errors, assumptions or miscalculations.
We were contacted by Brenda Wooten at around 9:30 A.M. On August 22 the day of closing informed us that the USDA would not guarantee funding for new home purchase under that particular program. They indicated that we were over the income limits.
SHOCKING to say the least, since we were issued a HUD 1 Settlement Statement on August 21, the day before closing. Which was in parallel with the USDA Rural Loan that we expected to receive. At this point, things were inline with exactly the services the bank indicated we would receive. No indications there was a precise problem or another loan program. We even contacted the title company to receive permission to write a personal check for the minimal closing costs, instead of issuing a cashier check. That was approved. We were set, no worries! It had always been USDA from the beginning and confirmed that with the HUD 1 Settlement Statement that was issued.
At the time I didn't know what to think or say, my wife was in tears and my in-laws who bank with Eagle Bank were furious. Since our family was in the process of moving out of our home in Illinois and preparing for a 12:00 P.M. Closing on that property. We were also scheduled to close on the home in Missouri at 2:30 P.M. That afternoon. Brenda indicated on the phone about the FHA, but never indicated a VA Loan, which they knew that I was a veteran. Eagle Bank has indicated in several different responses to this complaint, "the only other option besides going FHA at this point was a "full denial". A full denial,? Please, we had been pre-approved for nearly 10 months prior to closing and I am a veteran. We had options, but was never presented those options we were just placed in a very bad spot, on the 11th hour with no options to fall back on. We didn't have time to renegotiate under a different loan program at this point, we were left high and dry.
At his point, I had only spoke to her a couple of times that day as she was screening her calls and was hard to reach. Our real estate agent also tried to reach her with no phone calls returned. She knew what she and the bank had done and was avoiding us at this point. We were told that we exceeded the limits of income because of a bonus that I received in early spring of 2008 from my company's performance of 2007. Keep in mind that the bonus was received in early spring and we closed in mid summer. The bonus amount was indicated and included in the pay stubs that Eagle Bank requested as late as July. This bonus was nothing I received one month, one week or even a few days within closing on August 22.
I made a phone call around 3:00 P.M. From my cell phone to the bank. We were in route to SE Missouri with no confirmation from the bank that anything was near completion with the loan. I was told on the phone that they were working on trying to get it completed, but it was Friday and they didn't know what was going to happen.By around 3:30 P.M. My wife calls me after receiving a call from our agent that the paperwork is being brought to her office in Festus, Mo. For us to meet her there. Not one representative from the bank showed up at closing/agent's office, the paperwork was sent to the title company and the title company brought the paperwork to our real estate agents office. When the title company arrived, the owner indicated he had not seen anything like this on closing day and our real estate agent was lost for words. After reviewing the documents I indicated that something didn't look right as far as totals and figures. I was right, more to follow.
So, we signed the papers under a great amount of stress and confusion. And headed to our home in SE Missouri. Not knowing what had actually happened, since their was no one from the bank there to explain anything. Our closing cost went from $ 27.52 under the USDA Loan to $ 4,566.54 under the new revised FHA Loan that was rammed down our throats. Yes, that money came out of our own pockets. We had to write the check or we would have been without a home as we had closed on our in Illinois 4 hours sooner. No other loan options, no way to renegotiate with the sellers under the new loan program, as there are options under the FHA with what the seller can contribute. We had only asked for $ 1,750.00 in closing cost to be paid by the seller since we we had a 100% USDA loan. We could have done something different, been more creative, but the bank knew that we didn't have a out on that day and at that time. It was to late. They knew I am a veteran, again why wasn't that a option? They knew we had made a small profit on our old house and had enough to cover the new money we needed for the FHA Loan.in my opinion, they targeted that money. Because they got themselves to deep into this loan and keep leading us to believe that we were going with the USDA Loan and fixed their mistakes by switching the loan at the last minute to the FHA Loan, blaming the USDA folks and then praising themselves for what a wonderful job they did to go above and beyond to put us in our dream home. Blah, Blah, Blah... Kinda like a magic show, now you see it, now you don't!
This really isn't about how Eagle Bank feels that they went "above and beyond" to get the new FHA loan done at the last minute, or "put us in our dream house" (that's their quote), or how "we had money to cover the new closing cost" (which has been mentioned several times), this is about "how did you and why did you "Eagle Bank" put my family in this situation to begin with? You had plenty of time to get some form of guarantee from the USDA, way before any closing date was established. There were other loan options out there and we didn't have time to use all the resources necessary under FHA in regards to negotiations. Someone dropped the ball, didn't do their job and now we are paying for that mistake. We were told that the bank could not give us any monetary refund but they dropped the rate from 6.5% USDA to 6% FHA. Wrong, the 6% was the FHA rate on that day, you didn't give us anything. You bribed the sellers to except the new loan by paying their administration fee at closing. Which I think is illegal, you forged our signatures one a document, which I know they are curious about that portion of the complaint, since they sent us a "Quality Control Program" asking for us to sign and by signing confirming that the documents that have been attached are ours that we signed at closing. Our escrow account with SunTrust (who purchased our loan from Eagle Bank) is also a mess, as our home owner's insurance is NOT being escrowed. Which is a requirement of the HUD/FHA. We have months of emails about the USDA loan, about income, pay stubs, etc... Leading up to this debacle.
Since August 22 we have filed complaints with the BBB of Missouri, The Attorney General of Missouri and 4 Sight Counseling, which is a HUD/FHA Counselor. We are also still awaiting for a final report to be sent to us from 4 Sight Counseling, but they have indicated verbally that they believe that Eagle Bank should refund the money due to us. Which is $ 4,366.54. I have not yet responded to the letter sent by Eagle Bank to The Attorney General of Missouri, but I will because their response really doesn't answer any questions of why this happened. See they are suppose to be professional mortgage officers, they know how to speak the language, they know the terminology, they know which words, phrases and documents to use to smooth things over, or at least try. We also will be filing a complaint with The Missouri Department of Finance soon.
Summary:
If Eagle Bank had followed the guidelines of the USDA Rural Development Loan procedure, had a guarantee in writing from them based on income guidelines, home value guidelines and property location guidelines this would have never happened. They had plenty of time after the initial pre approval time to complete the needed due diligence from the USDA. They had a Hud 1 Settlement statement issued, which means that the loan had went through the process, underwriting and was ready to close. They have tried to blame this on the USDA, they have tried to make everyone think they have gone above and beyond for us, gave us a lower rate but it is all lies. Sure they sent us a $ 200.00 check back because there is not a underwriting fee charged for the FHA Loan. But that doesn't fix this problem, that doesn't change the fact of what took place. This is a absolute disgrace to the mortgage/banking business.
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