CROOK ALERT! PULTE HOMES' PRE-APPROVED MORTGAGE DEALS
Preapproved: Well it Sounded Good but it Turned into Sleaze
In her column in the NYTimes February 6, 2011, Gretchen Morgenson tells the sad tale of Melissa Calderone's recent nightmarish experience when she attempted to buy a home in Windemere, Florida, from Pulte Homes, the nation's largest home builder.
Ms. Calderone was attracted to Pulte's Windemere development to be near her parents and a good school system for her children. Her local bank approved her application for a mortgage loan but a Pulte saleswoman offered her a $4,000 credit toward closing costs if she took our a loan with Pulte's banking unit. Ms. Calderone agreed and made a $20,000 earnest money deposit with Pulte and set aside and additional $80,000 for a downpanment on the $347,000 Pulte house. She enrolled her children in Windemere schools and waited for the closing date. Her agreement with Pulte provided that her $20,000 would be refunded if she canceled the deal within 45 days. Sixty-seven days after she signed up with Pulte, the builder's banking unit began to raise issues concerning her mortgage application which had been preapproved by the lender. For three months Calderone continued to respond to questions regarding her application. During this period nothing had changed in her financial situation. The closing date passed with no contact from Pulte. And in September, unsure whether her children could enroll in the Windemere schools, Calderone canceled her purchase contract and requested a refund of her $20,000 deposit. Pulte declined, claiming Calderone hadn't lived up to her obligations in the contract.
Ms. Calderone is not the only Pulte buyer who has experienced this kind of run-around. Last year the attorney general of Arizona filed a suit claiming that Pulte had deceived borrowers who thought their mortgages had been approved, when in fact they had not, and as a result lost their deposits ranging from $2500 to $25,000 each.
Pulte agreed to settle the lawsuit for $1.1 million, of course neither denying or admitting guilt. According to the Arizona Attorney General’s Office, Pulte’s representatives will not represent or imply that they are able to “pre-qualify” Arizona consumers for home loans.
Gretchen Morgenson's article is linked below.
"Pre-approved: Well, It Sounded Good" by Gretchen Morgenson in the NY Times 2-6-11
Although she had been preapproved by Pulte, the company ultimately denied her the loan. Then, contending that Ms. Calderone had defaulted on the purchase agreement by failing to close on time, Pulte kept her $20,000 deposit.
10-10-11Pulte Settles Arizona Lawsuit over Lending Practices for $1.1 Million
- Pulte Homes settles lawsuit with AG for $1.1 million
Pulte Homes settled a lawsuit filed by Atty Gen Goddard for more than $1.1 million. The lawsuit alleges Pultes pre-qualification practices, earnest money deposit policies and Spanish-language marketing violated Arizonas consumer protection law.
The Mortgage Insider--Pulte Mortgage Review
- Pulte Mortgage Review Lender Reviews Mortgage Insider
"Watch out for builder incentives. Be sure to read the fine print because you may only get the incentives if you use the mortgage company owned by the builder."
Complaints About Pulte
- Pulte Homes Complaints - I'm done with them
Be careful when dealing with the mortgage team in Denver. They are the most unprofessional group of people I've ever worked with. They'll play a shell game with you to try to recoup their incentives they offered in a form of a fee or higher interest
2-14-11NYTimes--Calculating the Annual Percentage Rate (A.P.R.)
- Do you know the difference between your mortgage's interest rate and it's A.P.R.?
The answer, many mortgage experts say, may seem counterintuitive: while the A.P.R. is popularly seen as providing a more complete picture of what you are actually paying each month, it often omits some costs.