So what does a “preapproval” letter mean to you, as a Borrower, the Seller, the Listing Agent or Selling Agent in Real Estate Transaction? According to CITIBANK – NOTHING!!! Read on if you care. This could help/hurt your chance of your dream home!
In a most recent transaction, a CITIBANK’S “PREAPPROVAL” letter is COMPLETELY WORTHLESS. The worst experience I ever received from a major lending institution. I am not a negative person, nor do I post negative comments, but this one deserves my attention and yours. I am sharing so that my fellow #realestate #agents, #buyers and #sellers would be aware of this practice by #CITIBANK. The Lack of integrity, trust and honesty from a lender could make you lose your dream home, money, and the bank WALK AWAY with ZERO Liability. In this case, the client did lose the dream home, lost $4000 in inspection fees, in the process.
As normal, I called the Loan Officer before presenting an offer to the seller, and asked all the specifics about the borrower’s approval status. As a mortgage broker myself, I am familiar with steps in getting a loan approved or a preapproval status. The Citibank Loan Officer answered “YES” to all my questions: have you received all the borrower supporting docs? Income and asset verification? “…Yes, this is one of our GOLD CLIENT. Clients are well qualified, I can get the loan done in 14 days”.
17 days later, I asked for confirmation re: appraisal report. Answer: we are waiting, there was an error on the report.
Day 18, I asked the Loan Officer to escalate the file, since contingency is due effectively that Friday, last working day for most. I was promised that a manager would call back. NO CALLs
Day 19, I sent a Notice to Buyer to Perform.
Day 20, a manager finally called back. He verbally promised that this loan was “NO PROBLEM”, and that, he “saved” these type of loans all the time!!! That he had authorized the underwriter to work overtime over the weekend, etc. to get this loan approved, and asked if the seller could agree to extend contingency, etc. So I did at 11 PM on a Sunday.
Day 23, called, texted, emailed, called, texted, emailed and NO ONES @ CITIBANK would take to call to provide update, and avoided a series of direct questions about the loan, rightful questions, since they were way past due! #CITIBANK had provided a preapproval and the transaction was on day 23, what’s the problem. Asked them for an upper manager name to further escalate – both the loan officer and the Manager IGNORED my request! So I got the name of the REGIONAL MANAGER anyway (thank you to some great agents and relationship I have). He promised that he will talk to his team, look at the file, personally!
Day 24, called, texted, called…. NO ONES @ CITIBANK would provide direct answer to several key questions that would make or break the transaction. After numerous calls, texts, emails without answers, I finally got an answer from the REGION MANAGER. When mentioned that the Buyer/Borrower is out of contract, and I need to know if their loan is approved or I will need to cancel the contract and the buyer would lose their dream home. This was the Regional Manger’s answer: “It was pre-approved and there was changes that occurred. You can do as you wish…”
This was after his manager had told me that there is no problem with this loan, then changed his mind and said: “I do not believe we have failed the client. Preapprovals are different than commitment letters which is why the client’s purchase agreement was accepted with a financing contingency. We will have a decision tomorrow by 2 pm” 4PM Day 24, no answer!
Dear Mr. #CITIBANK Regional Manager: The reason you got involved is (1) your team, the loan officer, manager have failed to deliver; and failed to escalate the problem 5 days earlier when asked and promised. (2) CITIBANK DOES NOT stand behind their words. (3) Your borrower was on the verge of losing their dream home and ~$4000.00 spent on inspections, seller lost 25 days waiting for answer from CITIBANK. CITIBANK can conveniently walk away, be off the hook without any liabilities. AND YOU HAVE NOT FAILED YOUR CLIENT???
If a “preapproval” is meaningless and “not commitment” as you’ve clearly stated and demonstrated, then why do you think this terminology of “preapproval” or prequalification would not appear in Legal Purchasing Contract! In our industry, a “preapproval” does mean a commitment and approval with typical conditions such as a purchase contract or appraisal. For your manager to say that a #CITIBANK’s “preapproval” in not a commitment” is worth mentioning so that other sellers/buyers/realtors would understand the true picture of how CITIBANK MORTGAGE operates and how they could break a real estate transaction, and have zero liability!
For your lack of care, integrity and honesty – Your premier client did lose their dream home, lost thousands of dollar spent on inspections, and lot of time for all the parties involved. Time is more than just money, when it comes to a real estate transaction. You are playing with people’s future and emotion.
Real Estate, etc. 