Q: I applied in mid-April for a mortgage loan for a handicapped accessible, ADA-compliant home in Florida. The bank issued a conditional approval almost immediately, giving what turns out to be false hope of quick approval. Since then the delays and information requests have been continuous, relentless and duplicative. A closing was originally planned for July 1.
Typical requests were again made June 26. Despite having given them tax forms in April, which included 1099s of retirement funds withdrawals, I was just informed they needed the statements that actually accompanied those 2014 withdrawals. They’ve had information about my retirement accounts since April but waited until four working days before the expected closing to request this information.
Needless to say, the disabled seller in Florida who wants to buy a home near his children cannot close on a home there with this delay. My disabled son who cannot stand any more Chicago winters is distraught at this delay.
More Top Picks Best Printers For Teachers
Is this typical of the mortgage business now or is the bank just too big — one of those large banks that really doesn’t care. I went to them because the representative is the wife of an acquaintance. She’s upset too.
You should know my wife and I have credit ratings over 800, sufficient liquid assets, equity in three properties, one of which the bank knows I’ll be selling; income of $80,000. No debts except two mortgages, one of which is with that same bank.
Shouldn’t the 1099s satisfy whatever proof the bank needs? I don’t understand — unless the bank is simply incompetent and just asking for this information as a stalling technique. Can’t imagine they’d do that.
A: I have made it a practice not to identify the banks my readers have complained about or even complimented. But for this column, I can say that the bank in question is a very large bank.
It will not be a consolation but you are not alone. Too many readers, and even some of my clients, have encountered similar problems. You submit all of the requested documents, and then they ask you to send them again. And then when they finally acknowledge receipt, they want supporting documents.
I seriously doubt the bank is purposely stalling. From my experience, there are three reasons for the delay: bureaucracy, fear of government investigation (the banks want to make absolutely sure that they have papered everything so they will not be challenged or penalized by a government regulator) and concerns about being sued in a class-action case.
Talk to a supervisor in the bank where you made your loan. Explain the situation and make it clear that if the loan is not approved (or denied) within the next three days, you will take your business elsewhere. That threat often works.
Q: My wife and I bought our home in 1971 for $44,000. Thirty years later, we transferred it to our living trust where we were both granters and trustees. The value at that time was $300,000. My wife died a year ago when the appraised value of the home was $600,000. At that time, my daughter was added as a trustee. Did any of that change the basis of the house for tax purposes if it is now sold by the trust?
A: No, your basis is still the original purchase price plus any major improvements you made over the years. But please don’t rely just on my response, since it is general in nature. Consult a tax attorney or a certified public accountant. If you talk with a CPA, have her make an analysis of what your tax basis is. That information will be helpful if and when you decide to sell.
Benny L. Kass is a practicing attorney in Washington and Maryland. No legal relationship is created by this column.