Buying a house is and will always be a stressful process. Gathering funds, exploring options, searching for a house and realtor, and generally getting all of your information ready is difficult and time consuming. It is, however, worth it if you end up with a key in hand at the end of the ordeal. However, if one or more of the institutions/people you are working with do not properly work their end of the process, the whole thing can become a nightmare. Corefirst Bank & Trust has proven, to this consumer at least, that they are unwilling to work with first-time homebuyers who are purchasing homes within their means.
The mortgage process usually involves applying for a pre-approval for a loan, finding a home, officially applying for the loan, waiting for the bank to have an appraiser evaluate the home, and then closing on the home. In each one of these steps, there is an evaluation process wherin the bank decides if they want to continue with the loan. During the pre-approval and approval process, the bank will evaluate credit scores, debt-to-income ratios, the purchase price of the home, and the down payment you are planning to make. If all of these check out, the bank will approve the loan subject to the appraisal. After that, the bank hires an appraiser (at the customer’s expense). The appraiser will write up a report comparing the home to other homes that have sold recently, evaluating the condition of the home, and noting any major risk factors. The point of the report is to let the bank know if they are loaning too much money on a home that cannot be valued at or above the value of the loan. Essentially, the home is collateral for the loan, so it needs to be worth what the bank is loaning out.
During the loan process at Corefirst, the approval process went fine for us. Our credit ratings, debt-to-income, and 20% down payment were all well above what is required for a traditional conventional loan. The loan office knew we were working with a foreclosure, but seemed only minimally bothered and assured us that the house only had to be worth the value of the loan (a piddling $21,800). Needless to say, the home valued at more than this (as almost any standing home would). This is where the problems started, however. The appraisal was marked subject to improvements. The bank looked at the appraisal and stated that all of the “issues” noted on the appraisal were required to be repaired before the house could be loaned on. These issues included items like peeling wallpaper, less-than-perfect wood flooring, old carpeting, and pet odor.
After discussing with the loan officer, I began to feel that there was a miscommunication happening between the appraiser and the underwriter (the person who evaluates the loan and, in this case, rejects it). Even though I expressed these concerns, the loan officer stood by the appraisal and underwriter, refusing to acknowledge the possibility that something was not right. Being the active consumer I am, I contacted the appraiser and was notified that only two items on the appraisal were actually conditions of the appraisal (basement work, which we had already arranged to have done before closing, and some electrical work).
Happy to have this cleared up, I met with the loan officer, explained the situation and was informed the underwriter would contact the appraiser. Keep in mind that I, the consumer, was doing all of the leg work here. The bank did very little to help with this. In fact, it was I, the uninformed layman, that noticed there might be some misunderstanding. To me, this should be the job of the person who is in control of the loan. Essentially, it became exceedingly clear that the bank staff was to entirely competent in their jobs.
After the underwriter talked to the appraiser, it was found that there was indeed some miscommunication. My loan officer said she would take the application to the review committee and they would reevaluate my loan to see if we could work it out. Needless to say, I thought that the issue had been rectified and there was a good chance things would go my way. I was, however, not getting too hopeful as it really did seem that the bank staff wasn’t truly sure of their jobs. Long story short, the committee met and rejected the loan yet again because of an overall rating for the condition of the home as average-fair and not average or above. Despite the fact that I was willing to escrow money for repairs (essentially allow the bank to hold onto a large sum of cash that could only be used for repairs and would prove to them repairs would be done) and the fact that they had already messed up before, they would not budge on their resolve to refuse my loan. Keep in mind that this was a conventional loan, not an FHA loan with special qualifications, I was putting down 20%, had every other factor in my favor, and the house valued out at approximately 55% over the loan value.
What makes the whole process worse is that Corefirst was the only bank it town that was working with a first-time homebuyer’s grant being offered by the city. Essentially, the grant encouraged first time homebuyers of lower income to purchase homes and Corefirst rejected the loan because the house was not in perfect condition. Very contradictory.
Needless to say, the whole process was extremely frustrating. The employees were subpar, the bank was overly critical and unwilling to work with the buyer, and the bank ignored all other factors when considering the loan. If you are considering looking for a home loan on any property that is “less than perfect”, consider your other options before selecting Corefirst as a lender. They will delay your loan process, cost you money, and deny you in the end. Then, you will find yourself a week from your closing date with no lender and less money than you started with.