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JP Morgan Chase - John S. Rabi - 08-26-2009
I always have been skeptical about the mainland mortgage companies trying to lend on Hawaiian properties, because they just have no clue about the local market. They don't know anything about lava zones, condotels, tsunami zones, etc.
One of my clients had a long term "relationship" with JP Morgan Chase and decided to get a loan from them on his Hawaiian purchase. After three weeks he got an e-mail from JP Morgan Chase that even though he is overqualified, the property he is trying to buy does not qualify for a loan because there are too many rentals there.
I sure have no idea how they got that info since even the management company of the condo complex doesn't have such an info, but that is not the point. The point is that they are not even willing to give this in writing to my client who is in danger to lose his earnest money deposit because of that. To make matters worse, they just simply disregard all requests for the loan denial letter, even though it's an industry standard form-letter! In addition, as we just found it out, they never even ordered the appraisal during that three wasted weeks!
A warning to all prospective purchasers to stay far away from JP Morgan Chase and get a loan through a local mortgage broker. (However, make sure it is not Island Home Capital! http://www.konaforum.com/forum/viewtopic.php?t=1285)
Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
RE: JP Morgan Chase - Dennis - 08-26-2009
Usually, at least here in Ohio, the appraiser is required to advise the lender what percentage of rentals vs. owner occupied there are in a particular condo development. What I think happened here is as you said, customers banker probably said no problem, we can take care of your mortgage needs only to find out that he couldn't deliver on his promise. He should have stayed with a local lender and you would probably be getting ready to close.
RE: JP Morgan Chase - Sandra A. - 08-26-2009
The local banks like BOH, FHB, CPB all have a list with every condo project. The list has the latest figures for owner occupied percentages, etc. So the loan officer or processor can look simply up the condo property and tell if they can lend on it or not, based on whether the lender is selling to fannie or freddie & meeting their guidelines or if their own bank's portfolio program is willing to take them. I seem to recall BOH maintained a good list with up-to-date data. This is where the lender most likely came up with the percentage of non-owner-occupied units. If the project is brand new many won't touch a single unit until the developer has turned over the Association to the owners. But then the bank that financed the development of the project may be offering the take-out loans for the first individual units. I know...[:0][:0][:0]
RE: JP Morgan Chase - mdd7000 - 08-26-2009
That is standard operating procedure for JPMorgan Chase. I worked for them for 8 years. Although I was in I.T., I worked on projects all over North America, including many in large call centers. I saw and heard so much of what you just described that it got to the point where I was embarrassed to tell people where I worked. Employees were never admonished for lying to customers or breaking federal laws and regulations as long as the "deal" made money for the firm.
RE: JP Morgan Chase - John S. Rabi - 08-26-2009
quote:There is a huge difference between a second home and a rental property. Nobody has data on the rental units in any complex unless the complex is a condotel.
Originally posted by Sandra A.
The local banks like BOH, FHB, CPB all have a list with every condo project. The list has the latest figures for owner occupied percentages, etc.
Had JPMorgan Chase said we don't lend on the unit because the number of owner occupied units are low than I wouldn't have said anything. However, they said they don't lend on the unit because the number of rental units is high in the complex, even though Certified Management (the property manager of the complex) told them that they have no data on the number of rental units there and it's not a condotel.
BTW, we still have not received the loan denial letter despite the numerous requests by both the Buyer and the Agent of the Buyer. JPMorgan Chase is simply disregarding all requests and communications. Thalk about customer service! [V][:0][
!][]Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
RE: JP Morgan Chase - Bob Orts - 08-26-2009
John, did they pull the applicants Credit Report?
Also, is there ANY way the lender could get an accurate number of rentals at that property? Would an appraiser normally be the only way to get that info? Last question, did the property management company say they were never contacted about rental numbers?
RE: JP Morgan Chase - John S. Rabi - 08-26-2009
quote:1. Yes, he is qualified.
Originally posted by Bob Orts
John, did they pull the applicants Credit Report? Also, is there ANY way the lender could get an accurate number of rentals at that property? Would an appraiser normally be the only way to get that info? Last question, did the property management company say they were never contacted about rental numbers?
2. No. The property management companies of the associations do not have that data.
3. No. The appraiser wouldn't have that information, they can look up where the tax bills are sent, but off island owner doesn't automatically mean rental property. (Actually, the ONLY person who could give you an unofficial number of rented units would be the Resident Manager of the complex.)
4. They were contacted and told JPMChase that they do not have that info.
Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
RE: JP Morgan Chase - Bob Orts - 08-26-2009
O.K., did they do an appaisal on the property and did that appraisal have any info on rental units in the complex? Did it have any negative anything about the unit?
Also, do you know if they did income/employment verification on the client?
Is there anything with this property such as Lava Zone 1, involved in a legal land dispute, or anything that had there been no rentals at all would have disqualified the property from a loan with the lender?
Basically, is there anything with the applicant or property (besides the rental thing) that would have resulted in a loan denial?
RE: JP Morgan Chase - John S. Rabi - 08-26-2009
Bob, it's a premier condo in Waikoloa, so the lava zone is not an issue. Also, as I posted at the beginning, the Buyer was approved for the loan, but the property wasn't. I guess I am not very clear with this for you guys, but I will repeat it: the appraisers have no information about the number of rentals in any complex. If there is an on-site property management company (like Kanaloa, Kona Bali Kai, Kona By The Sea, Royal Sea Cliff) than they can tell the lender how many rental units they manage, but if an owner chose not to go through the on-site rental program they wouldn't know if that unit is a rental or a second home.
To answer your last question, the answer is no. My client switched to Bank of America for the loan and they have no problem with the Buyer, nor the unit.
Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
RE: JP Morgan Chase - Bob Orts - 08-27-2009
We basically have a situation where the lender denied the loan based on something that probably wasn't really available or accurate. They claim it was that information that resulted in the denial but won't put it in writing. That reasoning for denial falls within the narrow crack between federal and state reporting to the consumer meaning the reasoning allowed the lender to avoid mandatory reporting the reason for the denial to the consumer. Now, one would think that good business/lending/customer service practices would be such that the lender explains in writing the reasoning, but that is not the case. This probably happens because the lender knows they don't have too and they have gotten away with it for so long that it’s now a business practice.
So, what is it the client wants? If they want the lender to just put in writing the reason for denial, all the client has to do is file a complaint with the FTC under the FCRA. Yes, I know they didn't say the denial was because of the credit report, but since they didn't put the reason in writing, as far as the client is concern, it was the credit report that caused the denial. If they didn't do an appraisal and there is no legitimate reason to know rental numbers, about the only tangible thing the lender did have to base their decision on was the credit report. (The consumer is under no obligation to prove this, they only have to say the lender obtained the credit report, did not even do an appraisal, yet refused the loan, so it had to be based on the credit report.) The FTC will ask the lender why they refused the loan and not send the required denial letter due to actions based on the credit report. The lender will respond that it was not the credit report but (fill in blank) that resulted in the denial of the loan. Now you have a written document from the lender as to the reason for denial.