Stupidity in banking

04FXSTS

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Either that or they have some logic I cannot wrap my head around. As many of you here know I just moved to Indiana from Illannoy and if you don't know me I did not bring any liberal, socialist gun hating illinois values with me, just the wife, the dogs and the guns. Well we did not get the money we felt our old house was worth but the loss was worth it just to get out of that state.
We got a bridge/construction type loan so we could get our new modular built while selling the old home. Problem is the new home cost more than the old one sold for, it was a real nice home but real estate in illinois is not doing well for sellers. Now the stupid stuff for the new much smaller house loan, the bank not only wrote all the checks for the construction but also inspected everything before writing the checks. Now that we are getting a conventional loan for the remainder the bank is requiring the property be surveyed to make sure we have not encroached on any neighboring property. Having your property surveyed is always a good idea but seems to me it would have better to have it done before the house was built.
No worries here, the zoning head came out and checked to be sure everything was off the right of way and a lot over a half acre no problem. This is the same bank doing both loans so I just don't understand this or the fact they had someone come out and appraise the property about a week ago also. Jim.
 

wtburnette

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Don't know anything about the banking aspect, though I suspect stupidity is the norm, but I wanted to welcome you to our 2A friendly state... :yesway:
 

jkaetz

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Different requirements for different loans. Most people you talk to are one step above phone monkeys. They click through whatever the prompts tell them to.
 

natdscott

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That’s a post-completion survey, and is standard protocol for any INTELLIGENT lender running a construction loan program.

It protects both you, and them, by assuring your living room is not split in two with your neighbor. Geographical ownership is, in fact, a thing.

If you think that cannot happen, I’m here telling you I have personally worked on a work-out situation that was exactly what I describe, but the survey was NOT competed. Years later....


So next time, call and ask questions, rather than assume they are being “stupid” and getting on a random gun forum to complain about solid logic that you just don’t understand.
 

Cameramonkey

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That’s a post-completion survey, and is standard protocol for any INTELLIGENT lender running a construction loan program.

It protects both you, and them, by assuring your living room is not split in two with your neighbor. Geographical ownership is, in fact, a thing.

If you think that cannot happen, I’m here telling you I have personally worked on a work-out situation that was exactly what I describe, but the survey was NOT competed. Years later....


So next time, call and ask questions, rather than assume they are being “stupid” and getting on a random gun forum to complain about solid logic that you just don’t understand.

I see his point. Why not surveyed first before if you need one done? Its ridiculous and feels like they put the cart before the horse for spending their money on the project before requiring a survey. So it was OK to lose construction $$ if the property wasnt surveyed correctly?
 

04FXSTS

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I would have no problem having a survey done BEFORE construction started, that would make perfect sense. Survey before and it is "you have to move things over 20 feet, easy to do. Wait till house is built, a lot harder to move the house. Jim.
 

churchmouse

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There is always someone in the money loop getting paid. That said...That's banking. There game.
 

spec4

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It could be they are selling your permanent loan in the secondary market which requires a spotted survey. For you, it doesn't hurt to have this out of the box. Some day you will sell and guess what? The buyer will want a survey unless they have mental problems.
 

IndyIN

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I know it is irritating, but the underwriting cannot take into account all the potential variables that make some of the processes look stupid. To some degree, it is keyboard monkeys following a prompt, but those prompts were put in place to mitigate risks and had to be created in a way that is largely consistent from loan to loan.


Your argument is logical, but one of the many permutations that they cannot tailor their process to.


I am refinancing my less than 1-year-old home because the rates are that good. I had to go through a complete (inside and out) appraisal that ended up being exactly what I paid for my house 11 months ago. Complete waste of my time arranging for an appriser to wander through my house, but that is the cost of refinancing.

I griped, had a beer, and got over it. I found my time is better spent being a baby about wearing a mask :cool:
 

Trigger Time

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There is always someone in the money loop getting paid. That said...That's banking. There game.
You beat me to it.
Having bought one and sold 3 (inherited 2) over the last few years, I've been nickel and dimed so much by banks and inspectors and title companies its unreal. And 1 house was in another state far away so it was even bigger pain in the ass to deal with.
They always have "their people" too. Its all a big pat each other on the back system with it all. Lenders, title companies, realtors. All one big circle jerk and you are the one NOT getting jerked.
 

Trigger Time

Mickey Mantle
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I know it is irritating, but the underwriting cannot take into account all the potential variables that make some of the processes look stupid. To some degree, it is keyboard monkeys following a prompt, but those prompts were put in place to mitigate risks and had to be created in a way that is largely consistent from loan to loan.


Your argument is logical, but one of the many permutations that they cannot tailor their process to.


I am refinancing my less than 1-year-old home because the rates are that good. I had to go through a complete (inside and out) appraisal that ended up being exactly what I paid for my house 11 months ago. Complete waste of my time arranging for an appriser to wander through my house, but that is the cost of refinancing.

I griped, had a beer, and got over it. I found my time is better spent being a baby about wearing a mask :cool:
Yep, now IS the right time to refinance. You'll save a bunch of $$ in the long run and even monthly.
But talking about the nickel and diming, yep, they'll charge you afew thousand dollars in closing costs to refinance. .and yep inspection again. Rediculous. It's a racket. Everyone wants their piece of flesh.
Gotta pay to play
 

natdscott

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Right after the "at"
I see his point. Why not surveyed first before if you need one done? Its ridiculous and feels like they put the cart before the horse for spending their money on the project before requiring a survey. So it was OK to lose construction $$ if the property wasnt surveyed correctly?

You’re not understanding the point of the survey.

Property quantity, quality, and boundaries should have been correct at the time of the first closing, and the initial Appraisal and Title Commitment are responsible for finding issues at that time, if any.

If an actual pin survey had to be completed to GENERATE a Legal Description that is able to be used by the above parties, then THAT Survey is long since complete... lonnng before the construction loan closed.

The Survey this gentleman is discussing is a much-simplified (and cheaper, typically) version wherein the company is tasked with just making sure the building that was built with the construction loan was, in fact, build-ed within the legally-described Real Estate it is SUPPOSED to be.

Does it make sense to do it post-completion? Hell no it doesn’t.

I do mine at the end of the foundation before I hand over even one more US Dollar.

Is an incorrectly-placed foundation a lot of money?

Sure it is. But it’s a lot less than it could have been.

Again, I reiterate that I have been party to one of those legal..um.... “negotiations” between property owners. We got lucky and the neighbor was willing to swap some wooded acreage 1-for-1.

Since “Luck” is not a way to run a business, we trust, but verify.

2007-2009 changed everything...and frequently not in logical ways.

It surely did.

But RE Construction procedures are pretty mature, and were in practice lonnnng before that debacle.
 

AtTheMurph

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I know it is irritating, but the underwriting cannot take into account all the potential variables that make some of the processes look stupid. To some degree, it is keyboard monkeys following a prompt, but those prompts were put in place to mitigate risks and had to be created in a way that is largely consistent from loan to loan.


Your argument is logical, but one of the many permutations that they cannot tailor their process to.


I am refinancing my less than 1-year-old home because the rates are that good. I had to go through a complete (inside and out) appraisal that ended up being exactly what I paid for my house 11 months ago. Complete waste of my time arranging for an appriser to wander through my house, but that is the cost of refinancing.

I griped, had a beer, and got over it. I found my time is better spent being a baby about wearing a mask :cool:

In that 11 months since you bought it you might have burned 95% of the house to the ground. Getting the appraisal protects them.
 

WebSnyper

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Yep, now IS the right time to refinance. You'll save a bunch of $$ in the long run and even monthly.
But talking about the nickel and diming, yep, they'll charge you afew thousand dollars in closing costs to refinance. .and yep inspection again. Rediculous. It's a racket. Everyone wants their piece of flesh.
Gotta pay to play

In that 11 months since you bought it you might have burned 95% of the house to the ground. Getting the appraisal protects them.

I recently refinanced after about 4 months of house purchase, and didn't need an appraisal the first time (between the property and the down payment, etc the bank's underwriting process allowed it to go forward without requiring one, which was fine with me as I knew what the property was worth and the appraisal is to protect the bank but would have cost me $$) or the second time. If I had an appraisal the first time, the bank said they would have used it for the second round since it was in less than a year.

Also didn't pay any fees at all on the refi (there were a couple of prepaid items which are different than fees, that the escrow in the first account mostly covered due to the timing of property taxes, etc) as I was going with the same institution. Just redid the paperwork and netted a better rate.
 

amboy49

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Financing or refinancing residential property almost always involves the lender selling the loan, once closed, on the secondary market. Few, if any, banks keep residential mortgages in their loan portfolio. The money is made in origination fees and ancillary charges. The secondary market in turn sells the loans to investors. Your financial institution is merely following the secondary market guidelines. Also, what is required is an “improvement location” survey to demonstrate the construction doesn’t cross over any set back requirements or encroach into any easements. This is a benefit for the bank AND the homeowner. Builders can, and do, make mistakes and sometimes do dig foundations in the wrong place. Rare but it does happen.

Good “insurance” for peace of mind the house is properly situated on the real estate. “Stupidity” in banking. There are a lot of stupid things in banking, mostly government regulation driven, but I’d say this is not one of their rules that is all that stupid.
 

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