My first experience with Downey was several years ago when I opened a business account with them attracted by their low rates. The staff was all very personable and they seemed genuinely friendly, but this turned out to be really only true when opening the account. When any problems arose the staff was markedly less friendly. And there were a lot of problems, including piling on of fees and being forced to use a third party credit card processing agency. We ended up switching from one credit card to another, but they both had problems.

We ended up closing the account and switching to Union Bank of California, a move that we've never regretted. Union Bank runs their own credit card processing agency and act like professionals. Downey is rinky dink in comparison.

Several years later we decided to refinance our mortgage and were again attracted to Downey because of their low advertised rates. Two weeks into the loan application process we decided to increase the loan amount. At this point we were quoted a new, better, rate. A further two weeks later, however, I learnt that Downey's loan officer had made a mistake in offering us this lower rate and Downey now refused to honour this rate. I'd been trying to contact the loan officer for three business days, by e-mail and voice mail, trying to find out why I hadn't received a call to sign the loan documents, but she never returned my calls. It was only when I spoke to her manager that I learnt she'd made a mistake.

On their web site, Downey says,

"Now, money is all the same no matter who the lender is. So why Downey Savings? We are federally chartered and have been in the home loan business since 1957. Highly trained top-speed loan specialists will process your loan. "

My experience has once again been less than positive. A reputable bank should have stood by their loan officer's quoted rate, which was 6.00% at 0.625 pts. Instead Downey wanted to charge 6.5% at -0.625 points. Hardly a huge difference in any case, but Downey was absolutely inflexible.

As Tom Lehrer would say, "It's time to change partners again".

So we switched to American Express, PHH Mortgage Services (a.k.a. Cendant). These guys aren't exactly straight shooters either, as they advertise 5.75%, 0.75 pts, but gave us 6.00%, 0.75 pts on a 15 year conforming loan. This was close enough to what we wanted though that we gladly agreed to go ahead.

After these two experiences with Downey I've now sworn off them forever. Cheap is good, but to some extent you do also get what you pay for. Borrowing a large amount of money is a traumatic experience in that first month when all the details are being hammered out and you see the rates moving up and down. Once the loan has been funded the lender only cares that you pay on time. Downey made a mistake and then tried to pressure us into accepting the loan on their terms. I would like to believe that a reputable bank would have stood by the rate that we were quoted. We walked away, losing our $285 appraisal fee. I suggest you walk right by. Don't make my mistake of being tempted by the siren song of their sucker rates.


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