There must be a reason why they are extremely slow.
IndyMac Bank's stock has decreased, as of this day, more than 90% year-over-year. The CEO commented in a letter to shareholders that the company did make mistakes during the credit crisis and is now doing mostly government loans rather than their previous type of business (construction and subprime). So the mere fact that the company has turned so "conservative" is a great indication that they have done things wrongly in the past. My problem is only one of them.
IMB began an origination in May of 2007 for me to provide a loan to build an addition onto my house. Seriously, the loan finally closed in August. Representatives promised closing in July many times and even in August, all of which I have proof through email. So I turned away from other lenders while IMB dragged me along. To top it off, the appraisal was drastically low, which I know is rare. Why so low? I cannot prove this with documents at this time, but it would make sense for their appraisals to be low to guarantee forced PMI on their borrowers so they are protected. This low value made construction more difficult for me and obviously gave IMB their hope of PMI. That PMI would not actually start until the construction loan converted to an actual permanent mortgage, which I'll get to later.
IMB accidentally made the first month's payment for me out of my construction loan, so I notified them. It took them quite a while to research the fact that they were not supposed to do that. So then they put the money back into my construction account and hit me with a late fee in September of 2007 for my first month. Funny thing is, I still made the payment, but it was made on the 17th, which was a Monday. I specifically remember hearing a recorded message in their company telephone system that said payments made on the 17th would not be late for any borrower because the 16th was a Sunday. I complained to the company when I saw the late fee, but it was not refunded immediately.
IMB continued to charge me late fees for other months because payments were made in their company Web site, but not processed until after the due date, however their Web site clearly stated that payments would be considered made that day.
IMB was accurate with regard to inspections for my construction process until late November. This addition was built faster than most houses. The addition was 2,700 square feet and built by Amish builders in about a week.
A mechanic's lien was filed by a certain company (not mentioning the name) probably for mere protection in November of 2007. IMB was notified by me, but they continued to give funds to me, however not enough to pay off the lien holder.
Then I got suspicious, so I called IMB with the lien holder in January. In a conference call between me, the lien holder, and IMB, IMB promised funds would be released to pay off the lien holder once the lien was released. So the lien was replaced with a one-day second mortgage merely for the lien holders protection. IMB had proof the lien was released and the funds would be wired in less than a week. Guess what? The funds did not come. Why? IMB made up an excuse that construction was lagging compared to disbursements of funds from the construction loan. So I proved that their inspector was merely lazy by taking my own pictures of the project. Seriously, my building inspector from my town was very impressed at how fast the addition was built, especially compared to the development down the street by Ryan Homes. And here I am the homebuilder and I truly don't know the difference between a tree branch and 2 by 4 lumber or the difference between a pen and piece of copper wire for electricity.
It gets worse.
I report IMB to their shareholders and the Office of Thrift Supervision for not releasing funds. Uh oh, Goldman Sachs, which is a large institutional shareholder now knows what is going on, so IMB calls me with the CEO of Construction Lending. At this point, I'm trying to catch up on debt that was incurred as a result of IMB holding back funds and paying interest for my construction loan to IMB. Anyway, the CEO says he will release funds. Guess what, he then says he cannot release funds because I have a lien on my property. So I reply to him in an email, "Sir, the data on the mig is inaccurate just like your appraisal." Actually, that's from a movie, but he researched his own data per my request and learned that his borrower was correct yet again. So funds were released immediately. His condition though for releasing the funds was for me to completely finish the addition to my house. My argument was, "I gotta get caught up with these bills because IMB held money from me for too long. But I'll try to finish this thing as quickly as possible."
So all of my leftover construction loan funds were disbursed in February, which leaves me with nothing. Needless to say, most everything was finished except for flooring and trim. So I am now backed up, as I haven't been putting time into my business because I am personally working on my house. I consider refinancing, but I understand it is not a strong option because the house is not finished and I realize that this whole problem was created by IndyMac Bank from summer 2007 all they way through present.
Now I'm trying to work with IMB to possibly refinance, but they changed all their programs, so that was not going to be a possibility. I try to work with IMB to somehow modify the loan. That's when it all hits the fan.
CEO of Construction Lending is nearly begging me to convert to permanent mortgage. This goes back to the whole PMI issue. The loan, even to this day, is still strictly from IMB. IMB will get this note sold to a government-sponsored enterprise such as Fannie or Freddie and retain servicing (they'll make about a percent a year on servicing) and the PMI would protect them in the event of a foreclosure, which foreclosure was immanent if something was not done.
This CEO passes the ball (MJ did not pass when the game was on the line) to other employees and does - guess what - drags me on even longer. So now we're getting deeper into April. And have you noticed their stock price plunge, especially in the past week? I'm a Christian and I've been praying for IMB to be cursed. I've also been exposing them to mutual fund managers, star analysts, and large institutional holders. The stock price is now below $4. Do you know of any companies that have come back after going below $5? I know of a few that slipped slightly below $5 (which is where margins are cut off), but none that went below $4.90 a share. Anyway, I have tried to work with my mortgage company like a good little borrower. Look, I know many people whom hide from creditors and allow phone calls to go to voice mail. So here I am calling my loan company, IMB, almost daily, working with them. Employees of IMB offered me five grand to deed my house to them or merely list the property and put me in forbearance. I said, "I would quit claim to Michael Perry (their CEO as of today still) before I do that, out of sarcasm, which of course, Mike would not be stupid. We finally make headway. The headway is, "Reasonable alternatives" other than foreclosure. The CEO and one of his colleagues admit to the inaccurate data in the appraisal (my house was compared to a house built in 1853). And the other two comparables were more than 1000 square feet less than mine. And the CEO admits that he is A manager trying to follow protocol by having others work on the file before it comes to him, but it didnt work. So he gives me ideas of possibly rewriting the bad loan from last year or writing a whole new loan now with a new and possibly fairer appraisal. Problem is, theyre probably scared Ill do my research on this new appraisal and find the truth that they are either liars in the business of ripping people off or theyre just plain stupid. So most recently, I am offered forbearance, which forbearance apparently has stipulations that forces me to shut my mouth, get a new job, or convert to IndyMacism.
I'm sending email left and right to these employees with whom I am working. They're all confused. I'm preaching Jesus Christ. They're getting scared. And one email triggered them off: An email to all Board Members, large insider shareholders, HUD, Fannie Mae, the OTS. Evidently, IMB was offended, whereby I received a letter from a woman with the title, "Vice President - Customer Experience." Funny thing is, it was sent to an unknown address, but copied to my email. Even funnier, she bragged to me one time when I was talking about their stock being below $6 a share at the time, "That's why I'm an investor in IMB and you're not. I am in this for the long-term." Ok Ms. Customer Experience VP, I hope you can find a job when IMB is bought out because you're now at $3.41 a share as of 4/25/2008. This letter was a threat to take me to court for my "slanderous" comments to their company employees. Look, it's not slander if it's true, especially if we're talking about a public figure Mr. Michael Perry. And of course, foreclosure was threatened like it has been threatened for the past month.
Evidently, IMB can foreclose immediately because this is a construction loan, of which I was not aware.
Many banks are like this though. Some banks have survived the credit crisis such as U.S. Bank (USB), Chase (JPM), and Wells Fargo (WF).
Never gave me a GFE last year, never told me about PMI until a few weeks before closing, never explained immediate foreclosure. They know exactly what they are doing, which is why I argue against them being stupid.
Olmsted Township, Ohio