Opinion

Statement of credit denial

Jill Sigal Contributor

My experience with trying to get a home mortgage is limited to the one I had this week. Based on this experience I can understand why so many people hate banks.

I go over to my bank, you know, the one named after the big domed building on the Hill and the number Billy Martin wore as a Yankee, and ask about home mortgages. I explain my situation in detail and am told I need a “cash out refinance mortgage.” I answer questions for around 90 minutes. “What is your current address?” “Have you lived there more than two years?” “What is your former address?” I can’t remember the house number so I call my sister in New York and have her Google me and e-mail me the house number. “What is the ZIP code of your previous employer?” I don’t know this one either so I call my sister again and have her Google my previous employer.

Next, the bank executive shoots the application upstairs to the loan department. I receive a call the next business day telling me that, unfortunately, my bank does not issue the type of mortgage in the State where the property is located at the amount I am looking for. She is kind enough to give me the name of another bank that does issue these types of mortgages and tells me that their loan office has already called the other bank for me. I thanked her for letting me know so quickly and for providing me with the name of a loan officer at another bank. At this point in time I was feeling pretty good about my bank.

I don’t give this another thought until yesterday when I receive a letter from my bank stating – “STATEMENT OF CREDIT DENIAL, TERMINIATION, OR CHANGE” and in tiny little letters it says – “*Requested terms not available.”

I call the bank immediately and ask for the bank executive who had filled out the mortgage application. She is not working today. I ask for the branch manager. He is unavailable. I leave a message. No return call. I call again. He is still unavailable. I leave a message for both of them asking them to call me. No return call. I call the next day and get the bank executive on the phone. I ask why I would get a letter with the title – “STATEMENT OF CREDIT DENIAL” – when she told me that the bank does not issue mortgages of the type I was inquiring about. She says she does not know and will have the loan officer call me.

The loan officer calls me. We go back and forth for a while but he cannot give me a logical answer as to why I would receive such a letter when the bank, in reality, did not deny me credit because it would not have considered a mortgage application, unsigned by the way, for a mortgage that the bank does not issue. Next, I receive a call from the manager of the loan department. We go over the same issues and he tells me that the bank does not give mortgages of the type I am requesting in the State where the property is located. I ask that he put that in writing and send me a letter so that if I am ever asked about this I can show the letter and prove that it had nothing to do with whether I am credit worthy, which according to the credit bureaus I have “excellent” credit, but rather the fact that the bank does not issue these types of mortgages in certain States.

The conversation with the loan manager went something like this – –

Me: “Please send me a letter documenting what you just told me on the phone.”

Loan manager: “I can’t do that.”

Me: “So you’re willing to say it to me on the phone but you won’t put it in writing in case I need to explain this in a future mortgage application or if I am ever asked on an FBI background or security clearance form whether I was ever denied credit?”

Loan manager: “That’s correct.”

Me: “That does not make sense and does not instill any trust and confidence with me in your bank.”

Me: “Why wasn’t I told, prior to filling out the application, that your bank does not issue these type of mortgages? It would have saved everyone a lot of time and me a lot of aggravation.”

Loan manger: “I don’t know.”

Breaking news. While I am sitting on Capitol Hill writing this piece on my Blackberry I get another call from my bank. This time it is from the division manager. I walk the division manager through everything. We spend 15 minutes on the phone debating each word in the title of the document and debating why he should send me a letter clarifying the issue. He finally asks me what I want and I tell him that I want a letter stating that the bank, named after the domed building on the Hill and the number Billy Martin wore as a Yankee, does not issue the type of mortgage in question and therefore the bank did not consider Ms. Sigal’s loan application and took no action on granting credit. The division manager says that he will “research” it and get back to me.

I learned a few things from this experience:

Congress needs to continue to keep an eye on banks

Banks should always tell their customers BEFORE a mortgage application is filled out if they don’t issue the type of mortgage the customer needs

I need to find a new bank.


Jill Sigal is President of Jill Sigal Associates a consulting firm specializing in policy development, strategic planning, communications and government relations.