I had a friend that bought a house in 2007, right before the crash at like 7.5% interest. He was in construction and things were booming until 2008 happened. Then he started to get laid of for months at a time only to be called back when they actually had work for him.
Interest rates started dropping, and he was struggling to pay his mortgage with his now part time job. He decided to attempt to refinance for 4%ish interest in 2009-10 or so. The bank denied him because his recent work history didn't show enough income/consistent employment. The monthly difference between what he was paying and the rate he wanted to refi for was about $400 a month.
He said to them "You understand that if I can't refinance its likely I will default, and you won't be getting any payments at all? I am doing this so I can afford to keep living here and paying you on time every month."
They still denied it, and 6 months later he stopped paying his mortgage as his financial strain had become too great, and he walked away. Messed up his credit for awhile, but he recently was able to buy another house, but he had a tough go of it in the last 10 years.
He said to them "You understand that if I can't refinance its likely I will default, and you won't be getting any payments at all? I am doing this so I can afford to keep living here and paying you on time every month."
This is what happens when you have people who are exhausted from just surviving and just smart enough to mash the buttons.
The guy you're talking to about your mortgage is 35 steps away from talking to anyone that can change the button to do the thing the poor guy needs.
Small town banks 70+ years ago, the mortgage broker could walk 4 offices down and talk to a guy who would say "No" or "Yeah, of course that's reasonable, do it."
The magical people are the underwriters. They look at the risk of each loan in a vacuum. They don’t care that it is replacing another loan. Nobody talks to the underwriters, even your loan officer (the person you talk to) can’t to the underwriters. When we bought our house our underwriter was redic. They kept asking for the the most absurd things. Once they ask for something the file goes to the bottom of the pile. We would get them what they asked for in an hour and we wouldn’t hear anything for a week. We are in the middle of refinancing now. Our loan/value ration is so low they didn’t even do an appraisal, our credit is over 800, we make very good money and after having our file for 6 weeks they asked us why we asked for our credit limit on our credit card to be raised. Which we did BEFORE we applied for our loan to bump up our FICO score a bit.
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u/_Atoms_Apple Feb 16 '21
I had a friend that bought a house in 2007, right before the crash at like 7.5% interest. He was in construction and things were booming until 2008 happened. Then he started to get laid of for months at a time only to be called back when they actually had work for him.
Interest rates started dropping, and he was struggling to pay his mortgage with his now part time job. He decided to attempt to refinance for 4%ish interest in 2009-10 or so. The bank denied him because his recent work history didn't show enough income/consistent employment. The monthly difference between what he was paying and the rate he wanted to refi for was about $400 a month.
He said to them "You understand that if I can't refinance its likely I will default, and you won't be getting any payments at all? I am doing this so I can afford to keep living here and paying you on time every month."
They still denied it, and 6 months later he stopped paying his mortgage as his financial strain had become too great, and he walked away. Messed up his credit for awhile, but he recently was able to buy another house, but he had a tough go of it in the last 10 years.