Family on verge of homelessness after Bank of America denies loan in 11th hour

[hvactec]

Update: Family won't face homelessness after landlords step into help and another Bank of America customer says he had a similar experience.

GRAND RAPIDS — Instead of moving into her dream house this weekend, Jane VanOstenberg-Smith might be homeless after Bank of America denied her nearly $70,000 loan in the eleventh hour.

Just last week, the Grand Rapids single mother of two had been told everything was a go on the loan for the modest three-bedroom house in Alger Heights. So she gave notice to her landlord, changed her address and her boys’ fall schoolbus route and spent nearly $500 on a washing machine and dryer.

But the loan deal fell apart less than a day before Friday’s scheduled closing.

“It’s just wrong,” said VanOstenberg-Smith, 41, who was in tears Thursday after receiving the news. “What they are using to deny me in the very last hour of the very last day is the same information they had six weeks ago when they pre-approved my loan.”

VanOstenberg-Smith’s experience is a cautionary tale that loan applications are never a sure thing until final approval. And lenders are scrutinizing applications more closely than ever as the country recovers from the mortgage industry meltdown.

Her real estate agent, Anne Lauten with Keller-Williams Realty, said this was just the second time in her 14-year career that a bank has pulled out at the last moment with a client. She is now scrambling to find another lender for VanOstenberg-Smith.

We were totally caught off-guard because everything seemed to be moving in a positive direction,” said Lauten, adding she was also told by a Bank of America loan officer to proceed with setting up the closing.

“Bank of America has left this family in a predicament,” said Lauten. “You don’t wait until the last minute, pull the plug and say we can’t help you.”

The lending giant is looking into the situation, said a Bank of America spokeswoman.

read more Family on verge of homelessness after Bank of America denies loan in 11th hour | MLive.com

 

[Caroljo]

Wow, didn't hear about this and GR is only 30 miles from me. But doesn't surprise me, someone i work with had just about the same thing happen to them. They have their house sold, now have to scramble to find another bank to work with them! And it's not just mortgages that the banks are screwing people with, it's very hard to get ANY kind of loan now if you have any little negative thing on your credit report. Doesn't matter why that negative thing is there either......

 

[C_Clayton_Jones]

VanOstenberg-Smith’s experience is a cautionary tale that loan applications are never a sure thing until final approval. And lenders are scrutinizing applications more closely than ever as the country recovers from the mortgage industry meltdown.

Loose horses, barn doors, and the locking thereof.

 

[Mad Scientist]

You have to sue in Federal Court to stop foreclosures. This loan modification trick they pull is designed to keep you busy while they finalize the foreclosure.

Sue them in Federal Court (pro se), that stops them cold.

 

[BoycottTheday]

With Dodd Frank messing with local banks and housing prices going down with every new appraisal im not surprised one bit.

I wouldnt want to write a loan not thinking the bottom has been hit, i keep hearing prices need to got down to 1998 levels as current prices are still over inflated from the boom.

 

[Avatar4321]

I always have a feeling that there is more to this story than is being told.

Shouldn't you wait till the loan is actually approved before you start moving anyway?

 

[hvactec]

I Think they rented with a option to buy, in so many months, years and they started the process of buying the property