Many numbers of fail

[bankworking]

SC tries to do a home equity loan a bit over a year ago. Prior he bought a custom build house for upwards of $700,000, then his wife lost her job. The change in income hit them hard and he took out about $40,000 in debt against his retirement, another $42,000 in credit cards ($38,000 with us). He owes about $470,000 on the house, so figures he wants a home equity to pay down the 1st mortgage enough to get it into a non-jumbo (cheaper mortgage) and pay off the extra debt.

Appraisal comes in at $450,000. The home equity doesn't happen.

SC takes some serious time to accept this, then wants us to create an unsecured loan, just for him, at $80,000 (twice the amount of our maximum unsecured loans), at 6% APR (at his credit score, his rate would be 10.99 for an unsecured loan) at 120 months (unsecured loans have a maximum 60 month term.

...so, yeah, that didn't happen either.

Now, a year plus later, SC is back in touch with me. Apparently he just tried to go through another bank to try to do the refinance out of a jumbo loan/home equity loan that he tried to do with me last time. They got an appraisal for his house at $442,000. Yeah, less than ours.

Can't we do anything for him? He's such a long-time customer. He really needs help getting out of this $80,000 worth of retirement/credit card debt.

Well, the home equity is out.

Yes, it really is.

No, we are not going to do a home equity loan for a house that appraises at less than you own on your first mortgage. You can pay us to run another appraisal, but you will be out of pocket that cost, and considering the circumstances, I cannot recommend that.

Plus side, you're credit score has improved.

Negative side: I know that because of the credit pull from the $35,000 card loan application two months ago... for a third car. Wife is still out of work. You really needed that 3rd car, huh? With a $35,000 price tag? That was a requirement?

Negative side: That $38,000 of the credit card debt that is with us...that balance is down to a whopping $36,500. Really been working at getting that debt down over the past year, haven't you?

Hmmm... I can look at your credit card transactions. Home Depot. Okay, that could be a necessity. Clothing store. Again, maybe... Restaurant. Another clothing store. Restaurant. Retail store, retail store, retail store... You know, maybe I've misreading this, but it doesn't appear to me that there is much NOT using the credit card going on here.

Now, since we dropped your credit card rate when your credit score improved, you have the lowest rate we offer (variable though) unsecured on that debt. 7.25% APR. Your retirement loans are 5.5%,and technically you are paying that to yourself. Your three cars are maxed out above their equity in their three, maximum term loans (you refinanced the other two to higher rates and longer terms? Really?), so no title loan possible.

..I really don't have a better rate/product for you that what we already have.

At which point, SC pulls out the same suggestion for the mythical $80,000 unsecured loan at 120 months and a 6% APR that he tried to sell me on this year.

Look. I have a fixed $40,000 unsecured loan at 7.99% APR and a 60 month term. We can pay off your credit card debt, close out the credit cards, and then you will be in a fixed term, fixed rate repayment. That is what I can offer.

Why yes, it is a higher rate than your credit card. Better though, because it is fixed.

Why yes, it is a higher minimum payment that your credit card. Aren't you trying to get out of that debt?

NO YOU CANNOT HAVE A $40,000 PERSONAL LOAN ON TOP OF THE $40,000 CREDIT CARD. Maximum unsecured aggregate total: all credit cards and personal loans you have with us, is $40,000. I can move it to a different product, but I can't increase that maximum.

...you want your wife to apply for the loan then.

The wife who you started this conversation by saying she still is out of work and has no income?

No, we do not offer loans to customers without income.

*sigh*

Here's the number of the credit counselor.

What? NO! I just told you. WE CANNOT and WILL NOT DO THE LOAN YOU ARE ASKING FOR.

...
....
.....

I swear, I'm not even portraying this completely. He asked for his 6% APR loan FIVE times. Even spelled out how it would help his payments, as if that was the part I wasn't quite getting.

Talk to debt management. I can't help you.

*UPDATE 12/20/2017*

One thing this Sc has, it is persistence. At least persistence in trying to ask someone to help him borrow his way out of the mess he got himself into and is not making any effort himself to truly get out of.

So, over the past month, plus, SC has continued to push for us to do "something" to help him.

Except he doesn't want to meet with a debt counselor.

And he doesn't want to try to sell off one of his three cars to see if he can drop that payment.

And he doesn't want to stop using his credit cards so as to at least not make the debt worse.

No, he wants his house to magically appraise for more money so he can have the equity to do what he wants.
Barring that, he wants us to come up with his version of an unsecured loan tailor made to assist him because he's a special snowflake who deserves it for breathing or some such reason.

So, SC persistence pushed his plea up the management chain to one of the bank VPs, the one in charge of lending. Who asked me to send him everything I had. I forwarded the whole email chain (THIS is why my emails to customers are ALWAYS professional and polite, no matter what the circumstances.... well that, and I really believe in doing my best at customer service, but it's nice to know that I can forward any email chain to a VP and not worry about what they will read.)

Anyway, the VP actually comes to see me, because he wants to know what he's missing. Because guess what, HE can't find anything to fight for either.

And I get to tell the VP pretty much: Yes, that's right. Nothing worth fighting for.

Doesn't help that SC decided to spend an extra thousand this past weekend at a department store on his credit card with us. I guess it's goodish that he had the available limit to spend, but still...

To (hopefully) end it all, the VP sent a rather strongly worded email to the SC...basically saying: "You make enough income. Stop spending so much."

By the way, this SC's income left over after his minimum debt payments is more than I make BEFORE my bills...

[MoonCat]

Any chance they could sell the house, and use the proceeds to pay off part of the debt?

And why does a couple need THREE cars? If one of their current two is on its last legs, or not suitable for, say, winter driving, then find a nearly-new one that suits all your needs and ditch one of the older ones.

[Slave to the Phone]

I think you were being very kind by advising him to speak to a credit counselor. Some people just do not get credit. I used to know an operating nurse who was smart as could be, but just didn't seem to understand that credit debt actually counted. The first time she met with her credit counselor, she had to sign a contract stating that they now had control of her credit, then they cut up all of her cards.

She was still in full denial, and just HAD to have a gas card. When she turned that bill over to them with her check on the next payday, they fired her and told her that they would no longer work with her to get her bills reduced.

For some strange reason, she thought this was totally unreasonable.

[earl colby pottinger]

Reduce Debt

This person knows nothing about reducing their debt.

Heck, just not buying the third car, stop going to restaurants and buying the extras at retail stores and he probably could had retired his credit cards by now.

And that nonsense of making minimal payments, a long time ago I did that and realized after paying out hundreds of dollars for store credit cards over three months that I was down less than $50 in debt. I bit the bullet and paid off those cards only to have all sort of people try to get me to open credit cards with them.

Also the credit cards I still have I always have to fight them to lower my credit limit, they always want to raise it and try to get me to use it to be in debt to them, no way!

[Sparklyturtle]

Seriously. Years ago when I was single my credit card debt got almost out of control. I say "almost" because I realized it before it became a huge issue. I was able to get a second job for a few months, and when the option of changing to swing shift on my main job came up with its nice night differential, I took it and was able to quit my second job. That second job gave me some much needed budget flexibility for several months, but one thing that really helped me was sitting down with a cheap notebook, writing out all my credit card debt, and working out a way to pay it all off. At the time I didn't know it had a name, but I used the "snowball" technique - put as much money as I could to pay off the one with the lowest balance while paying minimum balances on the others, then put that money on paying off the next lowest balance, and so on. It took me a couple of years, but I did it. I also took the scissors to all my credit cards except for one and closed the accounts once they were paid off. It was hard work, but I'm proud to say I did it. When Turtleguy and I got married, he told me he'd had to do much the same thing at one point, so we were both committed to not going any further into debt than we already were and we haven't.

[Nunavut Pants]

Also the credit cards I still have I always have to fight them to lower my credit limit, they always want to raise it and try to get me to use it to be in debt to them, no way!

Actually, the fact that the credit agencies pay attention to your balance-to-limit ratio means it is better to let them increase your limit.... IF you can avoid using that extra credit! That can be the tricky part, though.

[Racket_Man]

Also the credit cards I still have I always have to fight them to lower my credit limit, they always want to raise it and try to get me to use it to be in debt to them, no way!

Actually, the fact that the credit agencies pay attention to your balance-to-limit ratio means it is better to let them increase your limit.... IF you can avoid using that extra credit! That can be the tricky part, though.

I am one of those weird people who really does NOT like to use credit all that much. This comes from

1. having parents who grew up during the Great US Depression
2. having enough jobs yanked out from my life
3. AND a (now EX) wife who thought at times spending money was a sport between her and her friends even IF I WAS UNEMPLOYED and on UE benefits and that was our only income.

I have only had 2 CCs in my entire life --

one about 25 years ago. we had to buy some pricey stuff (like a new suit for me) one time then I lost my job 1 month later so had a balance of like $700 with no income. That finally got discharge in a bankruptcy involving a VERY large hospital bill my (now EX) wife had for 3 major surgeries in 11months.

The CC I have now gets used BUT is used very sparingly and not for major amounts and I pay it off all at once. Yes I let them raise my limit.

I got to where I am credit wise by being very frugal, intelligent, knowledgeable, and a bit Scroogie at times (not anywhere near either Scrooge behavior but yeah) and NOT try to live anywhere beyond my reasonable means ie. work pay and tips, savings, and spending only what is needed in my life except in cases of need like repairs to my furnace or the repairs I needed to make to my garage wall or painting all the windows and trim on my house (the last two things have needed to be done way before I bought the house from my deceased GFs estate). I do not have the latest and greatest "stuff" but yeah I will be able to get that when my say PC or TV die in the next year or so.

The person in the OP is just a dumb delusional fool

[earl colby pottinger]

Credit

Actually, the fact that the credit agencies pay attention to your balance-to-limit ratio means it is better to let them increase your limit.... IF you can avoid using that extra credit! That can be the tricky part, though.

It never hurt me, and I am 61.

However, I go on vacations and will spend $3000-$6000 dollars while away, I do pay it off in the next month or two so the credit card companies do make some money off me but at one time they raise my limit to $40,000 on my Canadian card, and a different time $25,000 on my US credit card.

I had to fight to get them to lower the limits.

One thing to know, I have three credit cards, one I use in Canada, one I use in the US and the last one for when I go cruising. It is VERY important to me to limit the cards in-case they stolen or hacked while I am traveling.

I gotten loans and line of credit without getting a better credit history, other methods for getting cash/loans require doing paperwork so you always know where the money is, but credit cards just need you to wave then thru a machine, easy come, easy go.

[csquared]

This is an interesting discussion.

A higher credit card limit should not make a difference to someone who can control their credit. It is nice to have if you ever have an emergency, and no one is requiring you to use it. plus, as stated already, it is better for your debt to credit ratio.

As for the credit card fraud, the higher limit is a risk the credit card issuer is taking. It does not change the liability that you incur. All my credit cards limit my liability to $50.00. Every time that I have had fraudulent charges, they have never held me liable for the $50.00.

However, I can also see your point. What if someone ran up $40,000.00 in charges, and your credit card issuer did not believe you? That would be VERY painful.

[Cia]

I saved for five years so we could take a family vacation to Vancouver, BC. I made all the hotel reservations two weeks early to take advantage of the 15% discounts which paid for almost all of our meals. The border guards kept pointing out that the hotels we were staying at where in the "rural" areas, I told them big deal so is my home State plus I saved enough money to pay for our meals. Yeah, they just stared at me after that. I didn't mind driving and Maple Leaf 1 became our friend. "Rural areas" turned out to be not in downtown Vancouver.

I kept a running total of dog/cat boarding, hotel receipts, meals, gas, touristy stuff and souvenirs - we came in under budget by more than $1000. Which was good because on the way home we lost a belt that took out our water pump west of Belgrade, MT.

[workerbee222]

I decided to finance last car. Saleswoman came back to us and said, "You know what we call this?" and held up a card with a number on it. "We call this a unicorn." It's only a three year loan, though, on a used car I can afford. Not $35k. I wonder if the couple in the original post imagined a tax exemption or credit for purchasing an electric car? I'm not sure that one can make money buying things for oneself, but I'm a simple woman with simple needs.

Man friend does not have credit cards at all, he knows his skill set doesn't work there.

[protege]

It's only a three year loan, though, on a used car I can afford. Not $35k.

Similar deal with my current car. No way can I afford a $35K car. Plus, after having my previous ride (and now the current one) getting smashed up near work, there's no way I'm spending that much on a car What I did, was to put down about 3/4 of the purchase price (gotta love doing a mortgage refinance/debt consolidation...as well as wea) with what I'd saved, and then financed the rest. Car should be paid off in 2 years.

Even so, I do have some credit card debt. Mostly because I've had to repair a *lot* of big things lately, and I've had some health expenses and vet bills. I've had no choice but to put things on the cards that I usually don't. Things like groceries, the phone/net bill--it was either that, or starve. It sucks to see what the balance is, but at least I'm making payments.

Anyhoo, it seems that the OP's customer got in way over their heads, and doesn't really understand how credit/finance works.

[Sparklyturtle]

When I bought my last car (in 1997) I went in preapproved for 35K. No way was I going to tell them that. I paid 8K for the car I'm still driving, a Geo Metro. It only had 23K on it when I bought it; now it's got 126K on it.

[Nunavut Pants]

When I bought my only new car (to date), I tried to get a loan for it. In part, that was in an effort to improve my credit rating, which had taken a beating a number of years earlier. The bank was kind of obnoxious about refusing to fund the loan, so my wife and I paid cash. Happily we had saved for that purpose.

I still miss the 1990 car that I sold to get that new car, though. Best $5000 I think I've ever spent.

[Argabarga]

Sometimes I wonder, deep down inside, if some people don't really get how money works.

Like every five seconds, sometimes....