Armed Polite Society
Main Forums => The Roundtable => Topic started by: Desertdog on July 24, 2009, 12:18:07 PM
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I bet the bank didn't learn anything from losing a customer like this.
Irate bank customer hits back
http://www.stuff.co.nz/national/2667215/190-000-withdrawn-in-20-bills
Defiant Mapua artist Roger Griffiths today made a stand against Westpac by withdrawing his $190,000 savings in $20 notes.
The bank provided a red-and-black carry bag to take away the cash after meticulously counting it in front of Mr Griffiths at its Nelson branch.
Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. "It's about time normal people took a stand."
He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said.
He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.
That more than met the bank's criteria for a 20 per cent deposit, and the property which included a home and commercial premises would have returned $500 a week, he said.
He was disappointed when his loan application was rejected, but it was Westpac losing $111 million to Lane Walker Rudkin Industries that tipped his decision to withdraw his money.
"They can lose $110 million with LWR but turn down a normal customer who has never missed a loan payment," he said. "If they don't have the trust in me after 25 years, there's a problem for Westpac."
Having decided to withdraw his money, he then decided to make it hard for the bank by requesting payment in $20 bills.
He said the Nelson branch told him it did not have that amount and he would have to also go to other branches at Stoke, Richmond and Motueka. However, he insisted the bank have the money ready to collect at 9am today. He then took it to the Nelson Building Society, saying he would rather deal with NBS because it was part of the community.
His message to Westpac: "If you don't support the community, the community won't support you."
Mr Griffiths' protest comes after a series of embarrassments for Westpac. On Tuesday its former Alexandra bank manager admitted defrauding the bank of more than $400,000, and it has been left red-faced over the slip-up that allowed $10 million to be wrongly credited to a Rotorua service station co-owner who had since fled to China.
Westpac media relations manager Craig Dowling said today that when the bank lent money it required certain information to be provided to enable that lending to be done prudently.
Ad Feedback "It's about providing evidence of an ability to meet regular repayments."
In Mr Griffiths' case that information was not provided for it to be assessed, he said. Mr Griffiths' withdrawal was disappointing.
"We would like to welcome Mr Griffiths back. We just need the confidence regular repayments can be met."
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I made a similar move once.
Not nearly as much money, but it made the point.
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My bank is a small bank, very conservative in their underwriting rules. I've been turned down several times for loans, all because I'm self-employed.
I put $300,000 to $400,000 a year through that bank, but they turn me down almost every time.
I think I'll follow this guy's lead.
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A young woman I worked with years ago said her father did something like this to Wachovia Multi-Mega-National Bank. Long-time customer, several times what he wanted to borrow in the bank, and got turned down. So he took his money elsewhere. Ultimately that's the worst thing you can do to a business. If enough people do it, no more business. Unfortunately, not enough people do it to places like Multi-Mega-National Bank and Chase Mega-National-Multi Bank. The [sarcasm]sharp heads[/sarcasm] running those places think the multi-zillion-dollar deals they make with a few big companies is where they make their bucks when in reality it's the millions of the great unwashed putting their dollars in that drives the business.
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I made a similar move once.
Not nearly as much money, but it made the point.
bet you liked that! i did it to chevy chase a while back loudly discussing why in the lobby as i closed out dads accounts then his wifes then lastly a trust fund i administer for my lil bro. i so poor if bowel movements were a nickle i'd have to vomit but the kin got money and for reasons that escape me they trust me with it. weird. the bank manager hated me proclaiming that i wouldn't do business with a bank that won't honor good checks. i have a clause in my contract that precludes me being paid in a check drawn on them without a 50 buck surcharge
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I did the same to Susquehanna Bank. They bought out my small town bank I used since I was a kid and made deposits with a handful of change. Ok... Gotta love fine print. Huge signs everywhere "FREE checking". In exceptionally small print, "Subject to minimum daily balance requirement." No mention of how small it is. Digging through the website? Need to keep $1,000 in your checking account, and can't dip below that overnight. At an interest rate of .05%
They also didn't care to hand me a piece of paper with all fees, rates, etc. So I told them I'd like my balance in cash. Anyone who would trust their money to a bank who hides the terms and conditions is a fool. I wasn't loud and abrasive. But I wasn't whispering either. The tellers (who probably got a raw deal themselves) did not look displeased with my thoughts.
If you're doing business in or around PA, I highly recommend Fulton Bank. If you can swing it, Pennsylvania State Employees Credit Union is good also. Between the two of them, I have never had a single significantly bad experience.
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I secon Pennsylvania State Employee's CU.
I had them as my primary financial institution when I lived there. I still have a Visa card from them and always check out their rates before I get a loan elsewhere.
My primary is now Navy Federal Credit Union.
With the exception of a savings account with NRA's cobranded bank (Waterfield) and a couple of credit cards, all of my financial services are handled through NFCU.
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I made a similar move once.
Not nearly as much money, but it made the point.
I know a bank that lost a business payroll account, the checking accounts of the 8 employees that the payroll went to, and a chance to bid on a roughly $1.2 million dollar annual credit line over a $35 overdraft fee.
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He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said.
Tough cookies. You no show-a da income, you no get-a da loan.
"Successful" or not, fancy-pants exhibits or not, no lender in their right mind (or that insures their loans, which all banks do) will lend to ANYONE who can't prove their income on paper. If your income is egregiously irregular, as artist's can be what with single large sales on an occasional basis, I suggest you be ready for lenders to give you the evil eye. If you don't like it, pay cash. The only other real option is to set up a corporation and pay yourself as an employee. That way you can show regular income.
Brad
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Brad:
Is/should that true for historical deposits into the institution from which you seek the loan? I certainly understand skittishness with unconventional earnings, but they could obviously evaluate his financial history. Not challenging your assertion, genuinely quizzical.
SADShooter
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I'm with SADShooter on this one. Instead of relying on a book that says "Artist = irregular income = bad risk", how about using some brain power and evaluating the individual? Especially an individual who has $190,000 on deposit in that very bank?
It's the same stupid mindset that causes banks to demand (they say "request") two forms of I.D. if you want to cash a check on their bank but don't have an account. Stupid because they'll accept anything short of a note from your mother as I.D. When my wife and I were dating she wrote me a check - something less than fifty bucks - and I took it to her bank (BoA) to cash. The teller demanded two forms of I.D and I told her I carry one, a GA driver's license. She said, "Don't you have a work I.D.? A credit card? A Social Security card?" I replied, "No, no, and that's not a form of I.D. This is drawn on your bank, the money's in the account, cash the check." She said she would, this time, but next time I should have two forms of I.D. I told her that given the hassle I was getting this time I sincerely hoped there would never be a next time. And there wasn't.
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He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.
Brad,
From the story, it looks like he was going to put about $300,000 down on a $385,000 house. With this amount of equity they should have felt that he was not going to default on his payments.
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Brad:
Is/should that true for historical deposits into the institution from which you seek the loan? I certainly understand skittishness with unconventional earnings, but they could obviously evaluate his financial history. Not challenging your assertion, genuinely quizzical.
SADShooter
The problem is the bank isn't making the loan. They are originating paper they will immediately sell to a third party. Mortages are traditionally to small a margin for banks to bother with. They originate it, sell the paper, and take the money so they can lend it in more profitable ways.
The underwriters have very specific criteria regarding income (even moreso lately, what with the new fed regs). If your income is not regular and proveable income, it doesn't exist in terms of qualifying for a loan.
If the bank IS making the loan, they will want to insure it some way. In that case the insurance company will have certain guidelines for how the income is documented. That gets you right back to "regular and proveable".
Brad,
From the story, it looks like he was going to put about $300,000 down on a $385,000 house. With this amount of equity they should have felt that he was not going to default on his payments.
Has nothing to do with what they "felt". Has everything to do with his credit history (credit score) and PROVEABLE income (i.e. income documented by paycheck stubs, tax returns, or both). If his debt-to-income ratios or his credit history do not meet the minimum criteria for the loan, the lender isn't going to make the loan. Period.
Brad
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The underwriters have very specific criteria regarding income (even moreso lately, what with the new fed regs).
Brad
Let's keep in mind that this was in New Zealand, not the US.
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Thanks for clarifying the process, Brad. That makes sense in a "sucks" sort of way. So, the upshot is: save your pennies and draw the questions flowing from cash, or join the drone swarm.
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No, what really sucks is that banks got themselves into this mess by being arseholes, and now they're being even bigger arseholes (or are required to be).
Oh, did I mention that I HATE banks?
Credit Unions all the way.
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Let's keep in mind that this was in New Zealand, not the US.
Wouldn't suprise me if their lending regs closely mirrored those here in the states. Banks are international institutions. Short of certain county-specific regulatory things, banking rules and expectations are pretty universal.
Thanks for clarifying the process, Brad. That makes sense in a "sucks" sort of way. So, the upshot is: save your pennies and draw the questions flowing from cash, or join the drone swarm.
Cash isn't a problem if your finances are properly structured and you can prove uniformity and consistency of income. Cash becomes a problem when it suddenly appears out of nowhere.
Also, trying to use someone elses money will necessarily draw questions. Use the example above. Yes, the guy had $190k, but if that was everything he had then there was no cash reserves in case of an emergency (yes, lenders consider that). Sure, he was only getting an $80k loan on a $300k house, but did he have the income to service it? Chances are he didn't, or at least didn't have the consistency of proveable income needed to meet the loan criteria.
If I was a betting man I'd say the guy gets a big score every couple of years. That means he has plenty of cash right now, but no surety of income for the future. That will set off any lender's warning bell. Plus, artists tend to be a little sloppy in their business dealings. Day-to-day monetary management is drudgery to them, so it gets pushed aside until it can't be ignored. Artitstic types are just generally wired that way. It wouldn't suprise me at all if there was a host of money problems in his past.
Sorry, Mike, but I have to disagree. A credit union is still a bank. They just have different words on the sign and are slightly more discerning in their clientele. They still deal in money, albeit on a smaller and more personal scale.
Brad
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Speaking of annoying problems with banks....
I had a problem with Bank of America one time. I had been a customer of theirs for nearly 10 years at the time. A teller made an error, and I didn't verify my receipt (which was my fault), and a deposit was made incorrectly. An entire order of magnitude incorrectly. Deposit of roughly $100, versus the check that was roughly $1000. So a week or so later, I get 3 overdraft notices... Hrm, says I, something stinketh. Look at my deposit receipt, see what happened. Head in to the local branch, copy of my deposited check in hand. With the receipt showing the missing zero. They corrected the deposit amount, but they refused to wipe out the overdraft fees. Took it all the way up to the branch manager. Still refused. Wasn't yelling, but made sure the entire branch could hear that I would no longer be doing business with them, and why.
So after everything else had cleared, I withdrew the remainger of my balance. Well, almost all of it. I left $0.12 in that account. For 5 years. I refused to go for the electronic statements when they implemented that. So every month, for 5 years, they sent me a paper statement. Between the postage, paper costs, ink, inserts, etc, I figure that it was costing them about 50 cents a month to mail me a statement. Over 5 years, I figure it cost them about $30. Oh, and I know it cost them other business as well, because I know of 3 friends that closed their accounts there because of what happened to me. Did it make a huge impact on their bottom line? No. But it did give me a sense of satisfaction nonetheless. :)
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I once had the bank credit an extra paycheck when I had direct deposit, I pointed it out to them and they said
they would take it out in a few days.
I also asked if they would pay me a fine for their mistake as I would be charged for a mistake if I goofed.
Nope.
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Oh, did I mention that I HATE banks?
Credit Unions all the way.
Amen, brother. NFCU and PFCU are my only financial institutions, except for a small mortgage on the river property with a local Northern Neck bank. Just for the local aspect of things.
TC
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"Sorry, Mike, but I have to disagree. A credit union is still a bank. They just have different words on the sign and are slightly more discerning in their clientele. They still deal in money, albeit on a smaller and more personal scale."
No, credit unions are not banks. Either by legal definition or by practice.
What credit unions and banks are, however, are depository institutions that allow you to manage and control your money. It's there that the similarities end, both functionally and legally.
By law, credit unions are not for profit. Banks are for profit at the expense of the customer.
By law, credit union boards of directors are volunteers. Bank board members are often paid millions of dollars a year, plus millions more in stock.
In credit unions, the users are members. In banks, you're a customer.
Compare the largest credit union's fee structure with the largest bank's fee structure, and you'll see exactly where you rank as a bank customer -- as a center of potential profit to be drained as quickly and as ruthlessly as possible.
The list of tangible differences is a long one, and a very important one.
Case in point...
A number of banks in the DC area have been increasing their fees on electronic bill paying services by tightening up on the number of checks you can write a month, etc. Navy Federal a few years ago DROPPED its monthly fee for bill paying services completely.
I think it's also pretty damned interesting that over 50 banks have failed this year and have been closed by regulators, but so far only one member credit union has been closed that I know of.
Just because two things look similar dosn't mean that they're the same.
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Exactly, since joining a credit union I will never again go to a bank.
After my capital one fiasco my credit union was more then happy to issue me a card that covered both my cap1 cards balances, had a better interest rate, and by FAR a better fee structure.
I personally think for loans and such that's where they really excel. The rates are typically better, but the fees are almost non existent in comparison. I think the only fee with my CU that is no better then a banks is the fee for bouncing a check, which is understandable.
I will say some CU's do operate a tad closer to a bank then I like, such as my former very local credit union. I have found the state one to be great though.
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Speaking of annoying problems with banks....
I had a problem with Bank of America one time. I had been a customer of theirs for nearly 10 years at the time. A teller made an error, and I didn't verify my receipt (which was my fault), and a deposit was made incorrectly. An entire order of magnitude incorrectly. Deposit of roughly $100, versus the check that was roughly $1000. So a week or so later, I get 3 overdraft notices... Hrm, says I, something stinketh. Look at my deposit receipt, see what happened. Head in to the local branch, copy of my deposited check in hand. With the receipt showing the missing zero. They corrected the deposit amount, but they refused to wipe out the overdraft fees. Took it all the way up to the branch manager. Still refused. Wasn't yelling, but made sure the entire branch could hear that I would no longer be doing business with them, and why.
So after everything else had cleared, I withdrew the remainger of my balance. Well, almost all of it. I left $0.12 in that account. For 5 years. I refused to go for the electronic statements when they implemented that. So every month, for 5 years, they sent me a paper statement. Between the postage, paper costs, ink, inserts, etc, I figure that it was costing them about 50 cents a month to mail me a statement. Over 5 years, I figure it cost them about $30. Oh, and I know it cost them other business as well, because I know of 3 friends that closed their accounts there because of what happened to me. Did it make a huge impact on their bottom line? No. But it did give me a sense of satisfaction nonetheless. :)
I did the same thing with a bank years ago. I had a checking account with First Interstate Bank just over a dollar in it. They wanted to charge me two dollars for a certified check to be mailed out to me. I told them to keep the account open as I would use it again soon. I made them send me statements for years. I would call them occasionally telling them to keep my account open. I made them spend over ten dollars in postage over several years before they finally wrote off my balance.
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Banks don't care about customers anymore. They got billions in bailout money without the hassles of customers. One big bank pays a yield of .05% on a savings account. They pay just over 1% on a one year CD. Unreal. And this bank got more than 40 billion dollars in TARP money. Screw them.
Yes, that's right. You give them $1000.00, and they give you fifty cents interest per year. Oh, and they have no problem charging 15%+ on credit cards and other loans. Remember that they got money to stimulate the economy, but they aren't giving out many loans, and they loans they give have very high interest rates.
Credit unions are the way to go. I closed an account at a bank to move to a credit union with much better rates. I asked for the branch manager as I had some comments for him. He explained that they couldn't compete with credit union rates. I politely told him that if they got rid of their numerous overpaid bigshots and their private jets they might be able to compete. He said there was nothing they would or could do. I told him that there was nothing I could do as I will not be ripped off by a badly run bank going downhill, and explained that I would spread the word that this bank sucked and they took TARP money.
The best part is that my credit union has an ATM agreement with my old bank so I can use any of their ATMs for free nationwide. Pretty funny.
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No, credit unions are not banks. Either by legal definition or by practice.
What credit unions and banks are, however, are depository institutions that allow you to manage and control your money. It's there that the similarities end, both functionally and legally.
By law, credit unions are not for profit. Banks are for profit at the expense of the customer.
Okay, so it's a non-profit bank with membership privileges. From the end-user standpoint the functionality is essentially the same. You put money in, borrow on occasion, and get money out when you need it (if, of course, you actually have any left after the gov gets hold of you every year).
Brad
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I had a bad experience with BoA too.
I had an account for approx. 8 years
Nothing big just typical sub 2K account bouncing around for a twenty something paying his bills.
At the end of that 8 year run with them I made a mistake one month when things were real tight.
So I left the account in the red for several weeks. I contacted them to let them know I was working on resolving the
negative balance and they said I have 60 days to clear it up or it would be closed.
Fine, I eventually got the $250 needed to bring the account out of the hole and positive $50
The deposit was made as a transfer over the phone from one account to another 30days prior to the deadline.
I then went in a week later to make a deposit and they said that account was closed. You do have $250 in your savings account.
Would you like to make this deposit into it?
I quietly withdrew all my funds and told them to stuff their bank.
Technically I owed them $200. But since they violated their policy and jumped the gun and closed the account and put that deposit into my savings instead of correcting the checking account that was in the rear. And never bothered to contact me.
I decided it was time to leave them.
I have never heard back from them.
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I had a bad experience with BoA too.
I had an account for approx. 8 years
Nothing big just typical sub 2K account bouncing around for a twenty something paying his bills.
At the end of that 8 year run with them I made a mistake one month when things were real tight.
So I left the account in the red for several weeks. I contacted them to let them know I was working on resolving the
negative balance and they said I have 60 days to clear it up or it would be closed.
Fine, I eventually got the $250 needed to bring the account out of the hole and positive $50
The deposit was made as a transfer over the phone from one account to another 30days prior to the deadline.
I then went in a week later to make a deposit and they said that account was closed. You do have $250 in your savings account.
Would you like to make this deposit into it?
I quietly withdrew all my funds and told them to stuff their bank.
Technically I owed them $200. But since they violated their policy and jumped the gun and closed the account and put that deposit into my savings instead of correcting the checking account that was in the rear. And never bothered to contact me.
I decided it was time to leave them.
I have never heard back from them.
*grammar police* :police:
in arrears
*grammar police off duty* =)
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The problem is the bank isn't making the loan. They are originating paper they will immediately sell to a third party. Mortages are traditionally to small a margin for banks to bother with. They originate it, sell the paper, and take the money so they can lend it in more profitable ways.
The underwriters have very specific criteria regarding income (even moreso lately, what with the new fed regs). If your income is not regular and proveable income, it doesn't exist in terms of qualifying for a loan.
If the bank IS making the loan, they will want to insure it some way. In that case the insurance company will have certain guidelines for how the income is documented. That gets you right back to "regular and proveable".
Has nothing to do with what they "felt". Has everything to do with his credit history (credit score) and PROVEABLE income (i.e. income documented by paycheck stubs, tax returns, or both). If his debt-to-income ratios or his credit history do not meet the minimum criteria for the loan, the lender isn't going to make the loan. Period.
Brad
Therein lies the problem.
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"From the end-user standpoint the functionality is essentially the same."
Oh, well if THAT's the case, then a 1973 240Z and a 2008 Ferrari Testarossa are "functionally essentially the same" and no one is ever going to really notice a difference between the two. I mean, after all, they're both sports cars...
;/
Just because things LOOK the same doesn't mean that they're the same.
One "functionally essentially the same" observation about getting my mortgage through a bank, and when I got my original mortgage through and Navy Federal Credit Union...
I forget the name of the bank I used for the mortgage when I bought this house in 1993. Doesn't matter because it's been suctioned up several levels over the years.
But, I didn't even make the first payment on the loan when it was sold. OK, normal. Three months later, it was sold to another bank. Less than a year later it was sold again. And less than a year after that it was sold to its final resting place, Wells Fargo.
Every time the mortgage changed hands, the servicing changed hands. If it was Tuesday, my loan had gone someplace else, each time with newer, more annoying call center procedures.
In 2001 I refinanced with Navy Federal. To date, 0 transfers of my mortgage. Of course they've sold the note, that's a given, but they retain servicing for the life of the loan. No more musical servicers.
That's a difference people tend to notice.
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I'm with SADShooter on this one. Instead of relying on a book that says "Artist = irregular income = bad risk", how about using some brain power and evaluating the individual? Especially an individual who has $190,000 on deposit in that very bank?
Is sounds like the bank did show some brain power by turning down the loan.
Income from self-employed people and small business owners can be highly irregular and inconsistent. It sounds like the bank took a look at his past earnings and decided they weren't reliable enough.
The man was going to withdraw his $190k to pay for the house, so he wouldn't have had anything on deposit at the bank to cover the loan. He'd have to rely upon his (irregular) future earnings to repay.
The bank did the smart thing here. In the past they would have loaned the money without regard for the borrower's ability to repay. It seems those days are over, and now banks are starting to think before signing any loans.
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they'd own his house if he defaulted and they would lose nothin
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Banks aren't in the real estate business.
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they'd own his house if he defaulted and they would lose nothin
I think banks own enough homes right now as it is.
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The man was going to withdraw his $190k to pay for the house, so he wouldn't have had anything on deposit at the bank to cover the loan. He'd have to rely upon his (irregular) future earnings to repay.
Was he going to use the $190k? The article said he was paying $200k. I read that as meaning he had $200k for the house in addition to the $190k he had in the bank.
The article also said the property included a commercial component that would earn $500/week. Sounds like there might have been sufficient income to make the payments on a $80k mortgage
Chris
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I'm on board with CUs also. You don't see CUs building extravagant monuments to themseves like banks do. If you go into any city, the largest and most expensive building is going to have either the name of an inurance company or bank on it.
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Well, Navy Federal has a pretty damned nice headquarters campus in Vienna, Virginia.
Certainly nothing like some I've seen, though.
But they do have "Executive Men" and "Executive Women" restroom right out side the President and Vice President's office. But, the President and Vice President have their own pissers...
Last thing I did before I left Navy Federal for the last time was take a dump in the Executive Men's restroom.
And didn't flush.
Christ I hated that place.
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But, I didn't even make the first payment on the loan when it was sold. OK, normal. Three months later, it was sold to another bank. Less than a year later it was sold again. And less than a year after that it was sold to its final resting place, Wells Fargo.
Every time the mortgage changed hands, the servicing changed hands. If it was Tuesday, my loan had gone someplace else, each time with newer, more annoying call center procedures.
In 2001 I refinanced with Navy Federal. To date, 0 transfers of my mortgage. Of course they've sold the note, that's a given, but they retain servicing for the life of the loan. No more musical servicers.
That's a difference people tend to notice.
Problem is it's not a function unique to credit unions. Some credit unions do, some credit unions don't. Some banks do, some banks don't. It's the lender's call on how they service mortgage loans originated in their offices.
The article also said the property included a commercial component that would earn $500/week. Sounds like there might have been sufficient income to make the payments on a $80k mortgage
Chris
That's barely enough to cover the debt service on the P&I for the loan. It isn't, however, enough to cover the debt service on the PITI (payment, interest, taxes, and insurance). Due to the recent mortgage hullabaloo, opt-out mortgages are extremely difficult to get (an "opt-out" is where you pay your property taxes and insurance outside the mortgage).
Brad
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That's barely enough to cover the debt service on the P&I for the loan. It isn't, however, enough to cover the debt service on the PITI (payment, interest, taxes, and insurance). Due to the recent mortgage hullabaloo, opt-out mortgages are extremely difficult to get (an "opt-out" is where you pay your property taxes and insurance outside the mortgage).
Huh? $500/week, or $2000/month isn't enough to pay the monthly payment on an 80k mortgage? PITI on my 30yr/160k mortgage is significantly less than $2000/month
the property which included a home and commercial premises would have returned $500 a week, he said.
What isn't clear is whether or not that $500/week is his income from using that commercial premises or income to him from another entity using that premises.
Chris
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My bad. Didn't read it close enough. I was calculating it as $500/month.
$500/week is $26,000 yr ($2167/month). The max debt/income ratio is 41% (give or take, depending on credit score). That would leave $888/month for total debt service allowance. That would be just enough to cover an $80k mortgage on an $80-$100k house if he had no other debt obligations (which, knowing the artistic mindset, isn't very likely).
Even if he had no other debt load they are also figuring the taxes and insurance on a $300k house as part of the payment for that $80k mortgage. Those two things alone could easily be double the P&I for the mortgage (FYI - P&I on $80k @5.785% for 30 yrs is $468.64/mo). That $470 P&I payment suddenly becomes a $1200-$1500 PITI payment when you tack on the tax and insurance obligations. To qualify on that payment he would need to show a gross income of roughly $2500/month with no other debt obligations.
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"Problem is it's not a function unique to credit unions. Some credit unions do, some credit unions don't. Some banks do, some banks don't. It's the lender's call on how they service mortgage loans originated in their offices."
I recognize that. But you're far more likely to find that with either a large credit union or, oddly enough, a small bank, but not a small credit union and almost never a large bank.
And since when isn't $2,000 a month enough to service debt on an $80k mortgage?
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I recognize that. But you're far more likely to find that with either a large credit union or, oddly enough, a small bank, but not a small credit union and almost never a large bank.
Agreed.
And since when isn't $2,000 a month enough to service debt on an $80k mortgage?
I fubar'd the calcs (was thinking per month and not per week). But he's still SOL when you figure the taxes and insurance on a 300k house and add them to the P&I on the 80k mortgage. See my first previous post - I edited to add the numbers.
Brad
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I forgot about the taxes/insurance being on 300k rather than 80k. That said, it isn't clear if the $2000/month is HIS income or income solely from the property (rent from a tenant, etc).
Chris
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I'm still not seeing the numbers add up...
My house is valued, for insurance and replacement purposes, at $401,000. That includes contents, and more than minimum visitor injury, etc.
My yearly insurance premium is (last year) $570.
Taxes are a boondoggle, though. I live in a nasty tax area, but certainly nothing like New Jersey.
My taxes are just shy of $4,000 a year but can vary significantly from year to year as we're assessed (by law) every year.
My total monthly payment on a $158K loan (no mortgage insurance required) is $1,153 at 4.75% APR on a 30 year note.
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My yearly insurance premium is (last year) $570.
Taxes are a boondoggle, though. I live in a nasty tax area, but certainly nothing like New Jersey.
My taxes are just shy of $4,000 a year but can vary significantly from year to year as we're assessed (by law) every year.
You're lucky on both counts. Around here the insurance on a 400k house would be roughly $3400-$3500 yr on an generic average of 0.85% /yr for a 1% deductible, replacement-value policy. (Here in west Texas, hail and high wind capitol of the universe, weather-related expenses make for pricey premiums). Property taxes would be roughly $10,000 when figured at 2.5% of assessed value. No state income tax, though.
I'd have to know what the tax/insurance rates are for the area in question before I could really nail down a figure. It's still going mess the guy up, though.
Brad
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Move your ass east where everything doesn't burn the frick down/get beaten the frick down with hail/blow the frick away in the cone of a tornado every 6 months...
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The storms do make for pretty sunsets, though. :laugh:
Brad
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If you can breath for all the fricking red dust clogging your lungs and collapsing the aveoli...
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Just makes us all the more resistant to unconventional warfare.
Toss in smoking, and you've got asphalt-lined lungs. Sacrifice stamina for immunity and all that. =D