Refi Debacle
Written: Nov 09 '02
The Bottom Line
In concept, a great way to borrow. In execution, a total failure.
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Given the recent (early November 2002) drop in interest rates, we decided to shop around to see whether refinancing our mortgage made sense. After looking at various online sources and getting quotes, we knew it was time to refinance. We had used a traditional mortgage broker in the past, but given the promises of lower fees and better rates from online lenders, we thought it was time to try E-Loan.
E-Loan's website is very easy to use and we were able to get a quote on a refi that was competitive with other lenders (traditional and online) with what seemed to be much lower expenses (closing costs). So we went to the loan application screen, which was very well laid out and asked for a reasonable amount of information, and applied for the loan. It is important to note here that the application screen asks for social security numbers and claims that a credit check will be done immediately. A few hours later, we received an email telling us we had been "conditionally" approved for the loan and we would be contacted by our own E-Loan "loan consultant".
After a day of waiting to be contacted, we replied to the original email E-Loan sent again, asking when we would be contacted. Our concern was that interest rates were changing several times a day and we wanted to lock in a rate that made sense for us. We never received a response to that email so we called the 800 number. The representative who answered told us that no consultant had been assigned to us yet but he would take care of it and have the consultant call us within the hour. Six hours later, we still hadn't heard from E-Loan and we called again. The representative apologized, explained that we still hadn't been assigned a consultant but we would be assigned on the phone and transferred to the consultant. Of course, we were transferred into...voicemail. So we left a message and waited. The next day, we finally got a call back from our consultant.
The consultant explained that we wouldn't be getting the rate we were quoted because one of us had slightly lower than excellent credit rating (while the other had excellent credit rating.) We asked how much of a difference there would be and were told that it wasn't clear at that point, but the rate and points would be higher. We then asked the obvious question...if our credit reports were run at the time of application, why were we conditionally approved at the originally quoted rate? The consultant couldn't answer the question. So, because we had also been talking to our traditional mortgage broker, who knew our credit status and had already given us a quote that was only 1/8% higher than the E-Loan rate (and with no points, compared to E-Loan's quote of 1/3 point), we informed the consultant that E-Loan had to give us a firm quote on a rate and points very soon or we would go with the traditional broker to lock in a good rate. The consultant was blase at the prospect of losing our business but told us that if we faxed in a variety of documents (paystubs, W-2s, bank statements, etc), she could get it to underwriting to see what kind of rate we'd get. We agreed, but cautioned her that we needed to hear back within 24 hours (this was on a Tuesday afternoon) or we'd have to go with the traditional broker. She said it wouldn't be a problem to get a response by then.
It is now three days later and we have still not heard back from our consultant, despite sending her many emails and leaving at least three voicemails. We have, however, received a number of emails from E-Loan (none from our consultant) telling us that we can lock in a rate. Unfortunately, our consultant told us that we shouldn't lock in a rate until we hear back from her, as if we lock in a rate, we would have to get an appraisal (which is an upfront cost) and there was a good chance that underwriting would not approve us for the rate that we "locked". It seemed circular to us, but she said it was a quirk of their system.
The worst part is that rates dropped significantly at the time we wanted to lock and are now starting to creep up again. We have left our final voicemail for our consultant and told her that if we don't hear back from her on the status of our application, we will not use E-Loan. As she did not respond to the voicemail (or any of the emails), we have decided to not use E-Loan.
It's unfortunate that E-Loan engages in the bait-and-switch tactic and can't be bothered to return messages; the concept of an online refinance is attractive. Nonetheless, our traditional mortgage broker calls us every day to give us updates on rates and he is the model of customer service. We simply can't justify wasting any more time with E-Loan and would be very concerned that if they are so hard to communicate with when they are trying to sell us a loan, they would be even worse when we needed something from them.
E-Loan is a major disappointment.
Recommended:
No
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Epinions.com ID:
sneddren
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Reviews written: 36
Trusted by: 6 members
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