Friday November 27, 2015

Never Attribute to Malice

Never attribute to malice that which is adequately explained by stupidity.
Or incompetence. Or lack of care...

In 2000, we refinanced the mortgage on our house. Shortly thereafter, we applied for a home equity line of credit (HELOC). The former was with First Nationwide Bank; the latter with CalFed. In 2003, Citibank purchased both notes.

I don't recall the details of the application for the HELOC. The paperwork we have does say, in the fine print, that the note would be a revolving LOC for 15 years, then come due as (gasp) a balloon payment. I don't know what we were thinking. I can only presume we were planning to make sure that it was paid off before that happened. We don't have any notes from that time.

Our thoughts in 2000 shouldn't matter, because in 2004 we refinanced the mortgage with Citibank. We thought we were refinancing the HELOC at the same time. We were explicitly told that the LOC would be "replaced". We were also explicitly told that the terms would be: a revolving LOC for 10 years, then the note would convert to a fixed-rate loan to be paid off over 20 years.

But none of that is written down anywhere except in my memory, my journal, and one piece of confirming email I sent to someone who probably n longer works for the bank. What is important to our story is that none of that actually happened.

What were were told is not what transpired. Unbeknownst to us, the HELOC remained under the original CalFed terms.

Never attribute to malice that which is adequately explained by stupidity.
Or incompetence. Or lack of care...

In 2012, with interest rates low, we refinanced again, still with Citibank because it was "convenient". (Excuse me while I laugh, hysterically...)

We explicitly asked about the HELOC in 2012. "Oh, don't worry about that!", the mortgage officer said. "It's not due to mature for a few years.".

We should have worried. We should have asked more questions. But we were working with the bank; they knew what they were doing... right?? (Hysterical laugh...)

Never attribute to malice that which is adequately explained by stupidity.
Or incompetence. Or lack of care...

In September, 2015, we received a phone call from Citibank. Our HELOC was reaching its end point, did we want to renew it? Sure. But we couldn't just say "yes"; we had to gather paperwork. As long as we were doing that, we thought we might as well shop around. There was no urgency; we wouldn't be able to draw on the LOC but it would convert to a fixed-rate loan...

In October we received a threatening letter. We were in default on a balloon payment of [REDACTED].

We Were What Now???

We went to the bank. We spoke to Ms. K, a bank officer. She was confused. "Citibank doesn't do balloon notes", she said. She tried to call the Citibank Collections department. After 40 minutes on hold, she gave up.

"Perhaps you could refinance and roll this into the first...", she suggested.

We made an appointment to talk to the home loans officer the next day. We brought in all of the paperwork we had gathered for renewing the HELOC.

"Oh, my goodness", said the lending officer. "Yes, you have a lot of equity in your home, but you do not have enough income at present to apply for a refinance of the loan you already have. I'm so sorry about that."

No one apologized for wasting our time. No one offered to look into how it had come about that what we were told, back in 2004, was far from the truth. No one explained how it was possible to say "we'll replace the HELOC" and then not do that.

So now we're working with Citi Collections on a "Hardship Modification" application. We don't have enough income to refinance the loan and get lower payments than we've been making all along. We could break open a KEOGH, an IRA, or a 401K and puncture the balloon, but we feel that this problem is all Citibank's fault and we should be able reach a resolution that allows us to continue making payments as we have been doing so far.

When we finally reach Citibank managers who are able to go off script and speak to us like humans, they say "I'm afraid I can't go back in time to fix that...". They occasionally say "I realize this is not a normal case of someone failing to pay their statement for a few months..."

No one ever says "We made a mistake".

If you have a loan with Citibank? Pay it off and/or refinance it with another bank. Do that today before a problem comes to your door.

Citibank. They don't care. They don't have to. They're the bank.

This call may be monitored or recorded for Quality Assurance and Training purposes.

I could hope...

Never Attribute to Malice ( in category Trivial Pursuits ) - posted at Fri, 27 Nov, 19:54 Pacific | «e»

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