Beware of Quicken Loans

In Hawaii we encourage our buyers to use local lending institutions.  Buyers wonder why and sometimes think we're trying to help a relative or somebody else make some money.  Here's a great example of things going wrong with a mainland lender doing loans in Hawaii. 

A customer decided to make an offer on a townhome at Makaha Valley Plantation listed for $150,000.  We had previously made an offer on another listing in the same complex and obtained a loan prequalification letter.  The offer on that first property was not accepted and we moved onto another.  Since Quicken Loans had the buyer's information available, they issued a loan approval letter on the same day that we made our new offer.  We were feeling good about things and proceeded through the normal steps, conducting the home inspection, sellers disclosures, termite inspection etc.

This past week I called Quicken Loans to follow up on the loan document package.  The loan officer said "The buyer is getting the loan with another lender."  I asked for more info, she said she could not disclose anything more.

Next, I called the buyer and said "I just called Quicken Loans and they told me you have a new lender."  The buyer's response was, "What???"  Quicken Loans did not even have the courtesy of calling him to explain what happened.

The buyer quickly got on the phone and started asking questions to the people at Quicken Loans.  The played the pass-the-buck game and said it was out of their hands, etc.  Eventually the buyer got ahold of somebody higher-up and demanded a response.  That gentleman promised to take care of the matter the following day.  The buyer said okay, but he wanted an answer by 10 a.m. because we were just one week away from our scheduled closing date. (This is a 45-day contract and remember that they issued the loan preapproval on day one of the contract).

Predictably, the higher-up at Quicken Loans did not call back.  The buyer was upset when I called him later that day.  I asked if he wanted to get a loan through one of our Hawaii-based mortgage brokers and he said yes - time's running out, we needed to do something fast.

I called a loan officer with another company and explained the situation.  She said they could possibly get a loan done in the next week.  Our purchase contract has a clause allowing a seven-day extension for circumstances beyond our control.  I called the listing agent, explained the situation and let her know the addendum is on the way.  She understood and said "there's another example of why buyers shouldn't use a mainland lender!"  Yeah, I know.  It's hard to tell a buyer to switch when they've already picked their lender.

If you're planning to buy in Hawaii, please keep this in mind!  We don't want you to lose out on a deal and particularly on your escrow deposits, should your funding fall through and the sellers aren't nice enough to let you have the money back.

Aloha,

Mike Bates Hawaii realtor

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