The closing was recorded today, so I think now it's safe to talk about it.
I'm starting this thread to remind myself why I should never ever ever refinance again. So thanks in advance for reading along, and I hope this lengthy post is entertaining as well. Maybe one day I'll even see the humor in it.
We just closed a PenFed refi on a 3.625% fixed 30-year mortgage. It cost us their 1% origination fee, 1.125 points, and $1940 in closing costs. We dropped our monthly payment by over $200, though, so the refi will pay for itself in four years. (I'll pay off this mortgage right after my 80th birthday.) Refinancing has been driving our ER: my COLA'd military pension has risen by $713/month (27%) in the last eight years, but our real lifestyle boost has been dropping our mortgage payment by over $1140/month (40%) over the last decade.
Last August we noticed that rates were dropping below our old mortgage rate. Way back on 15 Oct, PenFed's website offered a 3.875% 30-year fixed-rate mortgage for 0.5 points. Maybe the Fed's QE2 will bring rates back down this low again someday, but it was the lowest credible rate we'd seen anywhere and we thought they might even have made a mistake in posting it. Even better, the final step in their online application offered the (unadvertised) 3.625% for a bit more in points. We signed the paperwork, scanned & e-mailed it back, and requested a 29 Nov closing. Six weeks sounded pretty reasonable.
By the way, PenFed's website mortgage application is great. They use it to generate ALL of the verification forms and closing paperwork, which means that nobody else besides me has to get the Hawaii names right. So I thought we were way ahead of the usual mortgage-spelling problems.
But we're getting what we've paid for, and the customer-service pain quickly started. The first thing the PenFed supervisor did was to "confirm" the wrong interest rate (3.875% instead of 3.625%). When I offered to scan & e-mail the website application's final printout he said "Oh, yeah, sorry, our mistake." He corrected the numbers and passed the updated loan paperwork to the alleged "senior loan processor", or SLP as I'll call her.
The SLP e-mailed me a day later to inform me that there would be a 0.625% charge for "changing" the interest rate. She actually admonished me in her e-mail "Our rates change every day, there are provisions for this. So please don't review rates once you have locked. There are fees associated with this." I e-mailed the supervisor. He e-mailed the SLP. Everyone reassured everyone that the rate was really going to be 3.625% for 1.125 points. No changes, no penalties. Great. Let's get on with it. I asked them to tell me when the appraiser would contact us.
The day after we received our verification letter (20 Oct) I scanned & e-mailed her the 16 documents she'd requested. (Scan/e-mail takes way less time than faxing, especially when you can get a PDF of a brokerage statement.) I heard nothing from her for over two weeks. Finally on Fri 5 Nov she e-mailed "Please provide a mortgage statement and the tax bill and the home owners insurance for your rental property. I am trying to close you [sic] loan on 11/20. Please expedite."
"Expedite"? Me?!? So I scanned & e-mailed it that afternoon... just in case she was staying late on Friday or working weekends. I also asked her once again to tell me when the appraiser would contact us. I asked her for an estimate of closing costs. I told her I hadn't heard from the title company yet but that I didn't think they'd be open on Saturday 20 Nov. I told her that I'd help things along by depositing our estimate of the closing costs into the title company's escrow account to make sure my check cleared before closing.
10 Nov, five days after I "expedited", I received her reply to my questions: "The tile [sic] company will come to your home up to 7.00 Pm [sic]. Thanks ".
Well, by then I'd talked with the title company and given them an escrow check. Home closings might have happened in 2005's refi gold rush days, but it wasn't going to happen on any future Saturday because the title company wasn't open on weekends. The title company guy thought that 7 PM on my back lanai was pretty funny, though, and he offered to bring the beer if I'd bring Ms. SLP. (He must not get out much either.) So I e-mailed the title company's update to SLP (well, except the part about the beer and the blind date) along with a request to know when the appraiser would contact us. Just in case you're keeping track of appraiser requests, that was #3.
Her response on 11 Nov: "We will try to close by 11/19. I Am [sic] a little perplexed about the escrow, what kind of check are you talking about. This is a refiance [sic] loan. Please advise. Thanks."
My reaction was "Holy cow, PenFed thinks we want to roll all the closing costs into the loan as part of the refinance. Noooooooo!"
I e-mailed my thanks for her clarification on the closing date and stated that we wanted to pay all closing costs from our own separate funds, and that I would really really appreciate an answer to my appraiser question. Because after all there were only five more working days for the appraisal to be finished in time for a Fri 19 Nov closing.
Her response: "I sent the note to the appraisal team, I will let you know what the manager says about the appraisal. The volume is extreme every where [sic] so we appreciate your patience. I will keep you posted. Thanks "
SLP was clearly struggling to keep up, so I gave up on her and left the supervisor a long voicemail.
All of PenFed must've been working on Veteran's Day. He called back with the news that PenFed doesn't actually handle closings or appraisals. They subcontract their closings to a Pittsburgh national title company, which isn't licensed in Hawaii ("national"?!?), so they'd sub-subcontracted with our local title company. PenFed had also sent out the appraisal request to yet another subcontractor whose status was "on hold". He'd since learned that meant the Mainland subcontractor had contacted the local appraiser but the appraiser hadn't gotten around to us yet. (Appraisers apparently don't worry about SLP's closing plans, either.) He said he'd check on the appraiser.
The supervisor was a little curious why I would want to put a bunch of money in an escrow account since PenFed wasn't planning to pay our property taxes & insurance for us. I explained to him that we didn't want an escrow impound account, either, but that Hawaii title companies open escrow accounts (that's the word they use, "escrow") to hold funds for closing and that the funds have to actually be in the account before the day of the closing or else a cashier's check has to be written from a local bank, but PenFed and NFCU are not "local" banks. There was an extended silence as he processed this new information, and he eventually asked if this was a Hawaii custom. I affirmed that. He said he had made sure that SLP understood our loan amount and that he'd send over a HUD-1 estimate of the closing costs as soon as he heard back from the appraiser.
[Notice that now I've had a conversation about property taxes and insurance premiums with two people, but nobody at PenFed actually discussed how those would be paid. It turned out they were saving that surprise for the closing.]
He also agreed that we weren't closing on the 19th, 20th, 22nd, or probably even the 29th. The "good" news was that the loan rate was locked until 13 January.
The appraiser called next morning (Friday 12 Nov) at 7:30 AM for a noon appointment, actually showed up at noon, and was done by 12:30. I gave him a copy of the floorplan with dimensions, so he was ahead of the game and he said he'd e-mail the whole appraisal to PenFed by the following Tuesday. Charlie Lum did a great job and I think he's an excellent appraiser. At least once someone actually puts things on his schedule.
Absolute silence ensued from PenFed for the next 18 days. They never even confirmed they got the appraisal. It was driving me nuts. Then on 30 Nov I got the following e-mail, which I'll quote verbatim without a bunch of [sic]s:
Quote
FW: IMAGE from Internet FAX
Mr. Nords, these are thee final findings, please complete this form
and submit to the below information. Thanks
The "thee final findings" attachment ("the"? "three"?) was a PDF of two IRS forms requesting transcripts of our tax returns. They were the same forms that we had sent back on 21 Oct-- nearly six weeks ago!!
Another voicemail to the "supervisor". Another e-mail back from him. Turns out she couldn't find our original requests so she decided it was easier to have us fill out new ones. He said she'd call next morning with an update on closing. Of course after getting yelled at by the boss and then having to spend more time on the phone with me, maybe they're going to reassess that type of decision next time they can't find their paperwork.
You local guys know what happens when a Mainland business promises to phone you next morning. Sure enough, at 5 AM HST (10 AM their time) my phone rang. SLP said that they had everything they needed (because they had it over a month ago!!) and they'd scheduled closing for a week later on Wed 8 Dec. She confirmed the loan amount and the interest rate.
PenFed didn't disappoint me at closing. At the last minute they slipped in a form that basically said "Oh, yeah, by the way we need you to pay your entire year of homeowner's insurance premiums ahead of time, even though your policy doesn't renew for another month. And while you're at it, why don'cha get ahead on your property-tax payments too... six months should do it." Sonsaguns never said a word about it during the entire process, and it was never on any of their preliminary paperwork, but it showed up on the HUD-1 closing statement. The good news is that the title company trusted me enough to go out on a limb and take a personal ("non-local") $2124 check, because we sure weren't going to be able to do it from an ATM and I didn't want to run across town twice to get a cashier's check.
The closing documents included yet another copy of the two IRS forms requesting transcripts of our tax returns.
First Hawaii Title was the best part of the whole refinance (although they didn't have to work very hard to look better than PenFed) because they gave us a 25% "frequent refi" discount on their processing fee and on reissuing the lender's title insurance. I'm glad they didn't get all bureaucratic about the cashier's check, either, but that would have wasted a lot of their time too.
PenFed is charging us a $25 recording fee to re-subordinate our old PenFed HELOC to our new PenFed mortgage. When I started kvetching, the title company guy said that if the HELOC had been with another company then we would've been charged a couple hundred more bucks to prepare the subordination paperwork before we paid the $25 to have it recorded. But he thought it was kinda cheesy of PenFed too. Maybe he envied their chutzpah.
If you're doing (or contemplating) a PenFed refi, then PM me and I'll give you the name of the supervisor and the senior loan processor. The supervisor got off to a rocky start and seemed out of touch, but once he knew about problems he took care of them. However you may want to avoid the loan processor. If this had been "my first refi" then I would've given up in frustration and confusion.
I'm glad that rates can't possibly get any lower, that this is our last refinance, and this time I really really really mean it. Again.
I'm starting this thread to remind myself why I should never ever ever refinance again. So thanks in advance for reading along, and I hope this lengthy post is entertaining as well. Maybe one day I'll even see the humor in it.
We just closed a PenFed refi on a 3.625% fixed 30-year mortgage. It cost us their 1% origination fee, 1.125 points, and $1940 in closing costs. We dropped our monthly payment by over $200, though, so the refi will pay for itself in four years. (I'll pay off this mortgage right after my 80th birthday.) Refinancing has been driving our ER: my COLA'd military pension has risen by $713/month (27%) in the last eight years, but our real lifestyle boost has been dropping our mortgage payment by over $1140/month (40%) over the last decade.
Last August we noticed that rates were dropping below our old mortgage rate. Way back on 15 Oct, PenFed's website offered a 3.875% 30-year fixed-rate mortgage for 0.5 points. Maybe the Fed's QE2 will bring rates back down this low again someday, but it was the lowest credible rate we'd seen anywhere and we thought they might even have made a mistake in posting it. Even better, the final step in their online application offered the (unadvertised) 3.625% for a bit more in points. We signed the paperwork, scanned & e-mailed it back, and requested a 29 Nov closing. Six weeks sounded pretty reasonable.
By the way, PenFed's website mortgage application is great. They use it to generate ALL of the verification forms and closing paperwork, which means that nobody else besides me has to get the Hawaii names right. So I thought we were way ahead of the usual mortgage-spelling problems.
But we're getting what we've paid for, and the customer-service pain quickly started. The first thing the PenFed supervisor did was to "confirm" the wrong interest rate (3.875% instead of 3.625%). When I offered to scan & e-mail the website application's final printout he said "Oh, yeah, sorry, our mistake." He corrected the numbers and passed the updated loan paperwork to the alleged "senior loan processor", or SLP as I'll call her.
The SLP e-mailed me a day later to inform me that there would be a 0.625% charge for "changing" the interest rate. She actually admonished me in her e-mail "Our rates change every day, there are provisions for this. So please don't review rates once you have locked. There are fees associated with this." I e-mailed the supervisor. He e-mailed the SLP. Everyone reassured everyone that the rate was really going to be 3.625% for 1.125 points. No changes, no penalties. Great. Let's get on with it. I asked them to tell me when the appraiser would contact us.
The day after we received our verification letter (20 Oct) I scanned & e-mailed her the 16 documents she'd requested. (Scan/e-mail takes way less time than faxing, especially when you can get a PDF of a brokerage statement.) I heard nothing from her for over two weeks. Finally on Fri 5 Nov she e-mailed "Please provide a mortgage statement and the tax bill and the home owners insurance for your rental property. I am trying to close you [sic] loan on 11/20. Please expedite."
"Expedite"? Me?!? So I scanned & e-mailed it that afternoon... just in case she was staying late on Friday or working weekends. I also asked her once again to tell me when the appraiser would contact us. I asked her for an estimate of closing costs. I told her I hadn't heard from the title company yet but that I didn't think they'd be open on Saturday 20 Nov. I told her that I'd help things along by depositing our estimate of the closing costs into the title company's escrow account to make sure my check cleared before closing.
10 Nov, five days after I "expedited", I received her reply to my questions: "The tile [sic] company will come to your home up to 7.00 Pm [sic]. Thanks ".
Well, by then I'd talked with the title company and given them an escrow check. Home closings might have happened in 2005's refi gold rush days, but it wasn't going to happen on any future Saturday because the title company wasn't open on weekends. The title company guy thought that 7 PM on my back lanai was pretty funny, though, and he offered to bring the beer if I'd bring Ms. SLP. (He must not get out much either.) So I e-mailed the title company's update to SLP (well, except the part about the beer and the blind date) along with a request to know when the appraiser would contact us. Just in case you're keeping track of appraiser requests, that was #3.
Her response on 11 Nov: "We will try to close by 11/19. I Am [sic] a little perplexed about the escrow, what kind of check are you talking about. This is a refiance [sic] loan. Please advise. Thanks."
My reaction was "Holy cow, PenFed thinks we want to roll all the closing costs into the loan as part of the refinance. Noooooooo!"
I e-mailed my thanks for her clarification on the closing date and stated that we wanted to pay all closing costs from our own separate funds, and that I would really really appreciate an answer to my appraiser question. Because after all there were only five more working days for the appraisal to be finished in time for a Fri 19 Nov closing.
Her response: "I sent the note to the appraisal team, I will let you know what the manager says about the appraisal. The volume is extreme every where [sic] so we appreciate your patience. I will keep you posted. Thanks "
SLP was clearly struggling to keep up, so I gave up on her and left the supervisor a long voicemail.
All of PenFed must've been working on Veteran's Day. He called back with the news that PenFed doesn't actually handle closings or appraisals. They subcontract their closings to a Pittsburgh national title company, which isn't licensed in Hawaii ("national"?!?), so they'd sub-subcontracted with our local title company. PenFed had also sent out the appraisal request to yet another subcontractor whose status was "on hold". He'd since learned that meant the Mainland subcontractor had contacted the local appraiser but the appraiser hadn't gotten around to us yet. (Appraisers apparently don't worry about SLP's closing plans, either.) He said he'd check on the appraiser.
The supervisor was a little curious why I would want to put a bunch of money in an escrow account since PenFed wasn't planning to pay our property taxes & insurance for us. I explained to him that we didn't want an escrow impound account, either, but that Hawaii title companies open escrow accounts (that's the word they use, "escrow") to hold funds for closing and that the funds have to actually be in the account before the day of the closing or else a cashier's check has to be written from a local bank, but PenFed and NFCU are not "local" banks. There was an extended silence as he processed this new information, and he eventually asked if this was a Hawaii custom. I affirmed that. He said he had made sure that SLP understood our loan amount and that he'd send over a HUD-1 estimate of the closing costs as soon as he heard back from the appraiser.
[Notice that now I've had a conversation about property taxes and insurance premiums with two people, but nobody at PenFed actually discussed how those would be paid. It turned out they were saving that surprise for the closing.]
He also agreed that we weren't closing on the 19th, 20th, 22nd, or probably even the 29th. The "good" news was that the loan rate was locked until 13 January.
The appraiser called next morning (Friday 12 Nov) at 7:30 AM for a noon appointment, actually showed up at noon, and was done by 12:30. I gave him a copy of the floorplan with dimensions, so he was ahead of the game and he said he'd e-mail the whole appraisal to PenFed by the following Tuesday. Charlie Lum did a great job and I think he's an excellent appraiser. At least once someone actually puts things on his schedule.
Absolute silence ensued from PenFed for the next 18 days. They never even confirmed they got the appraisal. It was driving me nuts. Then on 30 Nov I got the following e-mail, which I'll quote verbatim without a bunch of [sic]s:
Quote
FW: IMAGE from Internet FAX
Mr. Nords, these are thee final findings, please complete this form
and submit to the below information. Thanks
The "thee final findings" attachment ("the"? "three"?) was a PDF of two IRS forms requesting transcripts of our tax returns. They were the same forms that we had sent back on 21 Oct-- nearly six weeks ago!!
Another voicemail to the "supervisor". Another e-mail back from him. Turns out she couldn't find our original requests so she decided it was easier to have us fill out new ones. He said she'd call next morning with an update on closing. Of course after getting yelled at by the boss and then having to spend more time on the phone with me, maybe they're going to reassess that type of decision next time they can't find their paperwork.
You local guys know what happens when a Mainland business promises to phone you next morning. Sure enough, at 5 AM HST (10 AM their time) my phone rang. SLP said that they had everything they needed (because they had it over a month ago!!) and they'd scheduled closing for a week later on Wed 8 Dec. She confirmed the loan amount and the interest rate.
PenFed didn't disappoint me at closing. At the last minute they slipped in a form that basically said "Oh, yeah, by the way we need you to pay your entire year of homeowner's insurance premiums ahead of time, even though your policy doesn't renew for another month. And while you're at it, why don'cha get ahead on your property-tax payments too... six months should do it." Sonsaguns never said a word about it during the entire process, and it was never on any of their preliminary paperwork, but it showed up on the HUD-1 closing statement. The good news is that the title company trusted me enough to go out on a limb and take a personal ("non-local") $2124 check, because we sure weren't going to be able to do it from an ATM and I didn't want to run across town twice to get a cashier's check.
The closing documents included yet another copy of the two IRS forms requesting transcripts of our tax returns.
First Hawaii Title was the best part of the whole refinance (although they didn't have to work very hard to look better than PenFed) because they gave us a 25% "frequent refi" discount on their processing fee and on reissuing the lender's title insurance. I'm glad they didn't get all bureaucratic about the cashier's check, either, but that would have wasted a lot of their time too.
PenFed is charging us a $25 recording fee to re-subordinate our old PenFed HELOC to our new PenFed mortgage. When I started kvetching, the title company guy said that if the HELOC had been with another company then we would've been charged a couple hundred more bucks to prepare the subordination paperwork before we paid the $25 to have it recorded. But he thought it was kinda cheesy of PenFed too. Maybe he envied their chutzpah.
If you're doing (or contemplating) a PenFed refi, then PM me and I'll give you the name of the supervisor and the senior loan processor. The supervisor got off to a rocky start and seemed out of touch, but once he knew about problems he took care of them. However you may want to avoid the loan processor. If this had been "my first refi" then I would've given up in frustration and confusion.
I'm glad that rates can't possibly get any lower, that this is our last refinance, and this time I really really really mean it. Again.
