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Home >> Lending >> Business Credit
Good Loan Deal or Good Scam?
My wife and I have been working on refinancing our commercial property so we can do some needed repair, secure a better interest rate, and reduce our monthly payment. We were ready to sign with Wells Fargo, everything was approved. Just then, I had a conversation with my tax CPA, and he recommended we speak with another bank. I said okay, and he proceeded to call the president of the bank. The president and the chief credit officer were up at our property and in office within forty-five minutes of my CPA's call!
He said the bank is very interested. He was told that we were already approved by Wells Fargo, pending the appraisal, in writing, and had no problem with steel buildings. My wife immediately got him all the paperwork necessary. We immediately had a letter of intent outlining their terms. They were slightly better, so we had the appraisal done. This cost us $4,000. It took nearly six weeks to get the appraisal; we were told three weeks.
The bank opened up escrow. We have the documentation and the escrow number. The loan committee met on August 22nd, well after escrow being opened and we were assured everything was great! I followed up on the 22nd and nearly every day since. I finally got through to the chief credit officer on the 29th and he told me were denied because of too many leases being month-to-month (some of these have been corrected) and the "product type in El Dorado County". It also didn't fit their "product profile".
I now have lost time, money, my interest rate, and my deal with Wells Fargo. I really feel that I was misled. What do you think? They also are going to refund my $4K--I didn't ask for a refund.
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 It doesn't sound that either bank did anything underhanded. Your commitment from Wells Fargo expired and the second lender seems perhaps to have gotten the cart in front of the horse a bit by opening escrow before finalizing its commitment.
The second lender might have been more forthcoming about its "product profile" sooner in the process. That might have prevented your loss of the Wells Fargo commitment. A lot has happened in the last few months to make some lenders tighten up their lending policies, and some rates may have changed, but contact your first lenders to see if they will entertain a re-submission of your request.
Published on BankingQuestions.com 9/04/08
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