It has taken me several months to compose this post and I apologize for the long story. I needed to make sure I was writing with a clear head because every time I came back to this event I could feel myself getting angry all over again as I relived the entire disaster, but I feel so strongly that this needs to be told. Yes, I will name names because this is a true story of actual events.
While working with a buyer recently, I had the misfortune of also working with Prospect Mortgage in Campbell. It turned out to be the worst experience I have ever had for any transaction.
My buyer had already met with and been pre-approved for his financing by Carey Atwood (NMLS#312243) of Prospect Mortgage before meeting with me for our buyer consultation. I felt that my client had built a relationship with Carey and it wasn’t my place to jump in front of that to recommend someone new. I should have suspected that something was not right when Carey misspelled our client’s name several times on various email and correspondence.
Once we made an accepted offer on a property, I kicked off the process for removing contingencies — ordering inspections and telling Carey to get his financing lined up and the appraisal ordered. In most cases, I am usually called within a couple days by an appraiser telling me he/she will be doing an appraisal, and they like to ask questions if there is anything in particular they should be aware of (that effects the property value). Almost a week goes by without hearing anything so I called Carey to check on the appraisal — I was given an excuse about how it must have gotten lost in the system!
The lack of communication from Prospect Mortgage amazed me. Carey rarely if ever called me, I always had to call him. He didn’t like to return phone calls, instead preferring to write an email. So now I realized that I needed to constantly monitor his side of the transaction — was the appraisal ordered, when is it scheduled to take place, where are we with the loan application review and verification of income or assets, etc. His job is basically to get the loan approval so we can remove our finance contingencies and move forward with drawing up the loan documents.
Most appraisals come in exactly at the offered price (don’t get me started on that “miracle”). I have had some appraisals that come in 3%-4% lower than the offered price, so I need to kickoff an appraisal dispute process in order to make sure my clients are protected. In this case, we get word from Carey that the appraisal came in $15,000 lower than the offered price (less than 1.5%). I flipped out! Who does this kind of thing?! This never happens. That’s such a small number on a $1M+ property. After I pushed Carey to get to the bottom of it, he tells me the appraiser made a typo — it was supposed to be at our offered price! Don’t you think he should have fixed that before sending it out to me and our client?
Ok, now we’re back on track, or so I thought. The overall financing for this transaction was a $729,000 first loan, a piggyback equity line second loan for about $80k, and the rest made from the buyers cash down payment. At this point we’re approaching the time to remove our finance contingency. Essentially, once this contingency is removed, if my buyer cannot complete the sale then the seller has the right to keep the deposit money and sell to another buyer. You can see where this is going, can’t you?
Making sure we are good to move forward, Carey tells us we are “Good To Go” on financing, the loans are in place and we are free to remove contingencies. Sure enough, 2 days later Carey tells us his $80k piggyback second loan has disappeared. The lender won’t approve this loan. I was irate! This has NEVER happened when I have used my referred loan agents. Never!
Reviewing the situation — we are 2 weeks away from closing, $80k short of the purchase price, and $30k of my clients money at risk if we cannot close. Carey is useless finding another solution. After about 10 days go by where we poured over second sources and multiple solutions, my client reluctantly asks a family friend for a personal loan to replace the $80k and we’re back in business.
Now we go back to Carey at Prospect for the original $729k first loan and again Carey tells us we are “Good To Go”. So we begin to put all the pieces in place, get agreement from the seller to close a little later than originally scheduled and then Carey sends an email — their loan rate-lock on this loan has expired and the cost of extending it was something like $5,000.
I flipped out, again. At this point my buyer is exhausted, wants to give up, walk away, and sue everyone involved so I had to pull out the big gun to take care of this. I went to my broker, who has high-level connections within Prospect, and told him how Prospect is a bunch of incompetent liars who have screwed this entire transaction from the start and now expect my client to pay $5,000 for their mistake.
Suddenly, I began seeing more email communication from Carey than ever before and names I’ve never seen included on the CC list which I assumed were stakeholder executives within Prospect. Then a miracle happens, we get a 20-day rate-lock extension at no cost.
I’m confident we’re on track and everything is lined up to close in 2 days. Carey calls again — the Prospect underwriter is looking for the section 1 termite certification. There is no termite report, my buyer waived that inspection and the purchase agreement specifically made no mention of termite inspection or report — I yelled at Carey again to fix yet another Prospect screwup. He gets it fixed and we are finally able to close.
In conclusion, Prospect Mortgage and Carey Atwood in particular rarely delivered on anything they promised, they missed many deadlines and stretched the timelines way beyond anything I have ever seen, and worst of all, they always had an excuse for how someone else was to blame for the situation.
My lessons learned:
1) NEVER again work with Prospect Mortgage on any transaction, period.
2) I need to be more forceful and direct with my clients when they tell me they are already working with a loan agent they know. Not to say I don’t trust whoever they are working with, but if I have never worked with him/her before then I still want my clients to meet one of my recommended loan agents so I have a quick backup plan if anything goes sideways.
-Mark
