Archive for October, 2010

Sovereign Bank, you spin me right round baby, right round baby in a circle, circle.

I received notice from one of my mortgage lenders, Sovereign Bank that I’m facing an escrow shortage of $106 ; the notice from Sovereign, they want to collect nearly $500 as a “cushion.” That doesn’t seem to be very fair does it? I thought that a $200 cushion is fair, so I called them.

The first lady, we’ll call her Amanda because I didn’t get her name, stated, that per RESPA requirements, Sovereign Bank HAD to collect that much money from me…the $500. When I informed her there was no such requirement and in fact RESPA (Real Estate Settlement Procedure Act) allowed UP TO 1/6 of an anticipated shortage to be collected, she hung up on me. I was completely rational with Amanda; I asked to renegotiate the amount of MY money which Sovereign Bank wants to hold in escrow or trust. Amanda said that Sovereign Bank “Can’t renegotiate amounts held in escrow.” Click.

So after I was hung up on, I called back. I imagine Amanda thought that I’d give up. The first person I reached after working through the maze of pin numbers, social security numbers and options for a second time was Nicki Gonzales. Nicki was very nice but had the same song as Amanda, I asked Nicki to bump me up the line. Nicki sent me to her supervisor Maribel Garcia, Maribel was nice too. Maribel went over the fact that I’d signed documents authorizing two month’s cushion in my escrow account. I did point out to Maribel that this wasn’t true and to bump me up the line to Tracy the call center manager.

Tracy was nice too and very direct. Her first words to me were that Sovereign Bank is allowed to keep a cushion in escrow under RESPA guidelines and that’s what they do. I related that I understood that, but I didn’t want that much of MY money held by Sovereign Bank earning them interest and not me. I proposed half of the some odd $500 amount. I stated that I thought that was a fair amount for Sovereign Bank to hold as a cushion. I also pointed out to Tracy that her employees were telling clients that the consumers had signed loan documents authorizing the two month cushion. Tracy conceded that this fact was untrue especially when I cited the specific paragraph in my deed of trust (mortgage) which spoke to escrow accounts. The actual language simply says the lender may collect escrow amounts to cover costs. Nil, nada, zero, zip about cushions and buffers. So essentially the bank’s employees….lied, fibbed or stretched the truth or they didn’t know any better or the bank didn’t tell them any better. Either way what they are saying and doing is wrong, unethical and dishonest. Tracy finally conceded that it wasn’t a matter of “can’t” change the rule, it is a matter of “WON’T” change the rule. So up the line I went to Greg.

Greg is Tracy’s supervisor; he sounded nice enough but had that kind of banker dry as toast sound to his voice. He didn’t want to be on the phone either. I imagined someone very comfortable with spreadsheets and not people. Greg’s bend on the situation was from a “compliance” standpoint. Greg’s stance was that if they, Sovereign Bank, changed the rules for me they’d have to change them for everyone. I nicely pointed out to Greg that banks change the rules all of the time. He didn’t understand. So I put it to him this way; folks who have a lot of money earn higher interest rates than those who don’t, folks who have higher credit scores pay less interest than those who don’t so it is well within Sovereign Bank’s power to adjust the amount held in escrow if they care to do so. Alas poor Greg didn’t have much to say about that. By this point I had about enough of the run around.

I asked if Greg would bump me up the line, he would but told me I’d be told the same no, no matter how high I went. So, still with a civil tone; I imparted to Greg at Sovereign Bank that his institution had most likely benefited from a whole bunch of TARP (Troubled Asset Relief Program) money and that the next time banks needed a bail out, I’d remember this failure that I’d had speaking with and doing business with Sovereign Bank.

So, want a deal on real estate? Call me I’ll treat you like a client and not just a customer. 919-608-2372

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The Herald-Sun – City approves three rezoning plans.

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Private Transfer Fees
You got to just love this one. [Please insert sarcasm here!] Some new home community developers have instituted this little gem, A PRIVATE TRANSFER FEE. This practice is now banned in only 16 states, but here is how it works.

Consumer comes along and buys a new home from a developer and a little lien is placed on their deed and ALL subsequent deeds imposing a private transfer fee. These fees can be as high as 1%…$100,000 sale price = $1000 transfer fee, but it doesn’t go away with one sale, it is appurtenant which means it stays with the property FOREVER, which means every time someone sells, the DEVELOPER gets a slice of the seller’s pie.

This is so wrong but it does illustrate why it is essential that real estate consumers hire a full time, professional, market savvy real estate professional.

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