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Soviet dystopian physician loan nightmare with KeyBank, please help!

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  • #31
    I’ve had maybe 4 mortgages, current one with KeyBank. They were all somewhat painful but KeyBank wasn’t memorably more painful than the others.

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    • #32
      Originally posted by catch22 View Post
      Hello everyone!
      I'm an internal medicine hospitalist and graduated in 2017. My wife is a final year surgical fellow. We're relocating for her new job and having some difficulties with our mortgage lender KeyBank. It's causing a great deal of stress and anxiety for us and I was hoping to get your thoughts. Sorry for the wall of text.

      Current and future financial situation:
      - We own our current home outright which is under contract for $320K ($~300K net to us after realtor fees), we have $105K in the bank, and ~$350K in retirement savings. We have NO student loan debt. We are in our early 30s. I make $300K base right now plus bonuses, total combined income about $420K/year currently.
      - Future job start date Sept 2022, my future salary $240K+bonuses, her salary $320K+bonuses which escalates to $350K in second year and $380K in third year
      - Under contract for a $1.2M home
      - Mortgage is a KeyBank physicians loan, 10% down, 3.75% / 30 year with rate locked in until the end of June. Closing date is mid June.
      - $48K already paid in deposit towards the home, with $72K due at close + closing costs.
      - The mortgage stipulates that we can close within 90 days of employment start date, which is why we specifically timed our house hunt and closing date this way.

      We are in what can only be described as a farcical, Soviet-like bureaucratic nightmare. The bank has both of our employment contracts and letters from the onboarding person at our new hospital confirming our employment and start dates. The mortgage documentation guy told us we'd just need to provide another letter from the hospital ~30 days prior to close as a good-faith status report on credentialing. This all sounded extremely reasonable. Credentialing paperwork came in April 2022 so we've filled out everything, provided references, prior malpractice certificates, etc. We both have totally clean records.

      Suddenly about a week after we did our credentialing paperwork, we received word from our realtor that the seller's agent had never received a mortgage commitment letter from the bank. I called around to investigate and it turns out the bank has not provided this letter because they were expecting updated employment status from the hospital but they didn't ask us for it. Apparently they wanted another letter from the hospital stating income, start date, and any outstanding contingencies (i.e. credentialing).

      At this point I discovered that the initial documentation guy has become basically incommunicado. He's not reachable anymore. He doesn't respond to my emails or calls. Now we have a new person who is handling the account, whose title is mortgage transaction coordinator.

      The hospital provided yet another letter to the bank stating our start date, salaries, etc. They wrote that we've provided all documentation to proceed with credentialing, that the onboarding process is proceeding as planned, and that all credentialing contingencies had not yet been met but that they fully expect us to keep our start dates. This is all the truth. Credentialing is a months-long process that involves faxing and emailing all sorts of prior institutions like our residency programs, all prior malpractice carriers, etc, not to mention references from multiple busy physicians with lives of their own.

      I'm currently being told that the bank underwriter doesn't want to clear the loan because the hospital basically hasn't said we are ready to start work. I spoke to the bank contact person and confirmed that she is in fact specialized in physicians mortgages and she told me that she's familiar with credentialing time frames. She also reassured me that the underwriter understands the nuances of physicians employment. She said that in her experience physicians are fully credentialed by the time they reach 90 days prior to job start date. I explained that at least in my experience this is usually not the case, and the credentialing often takes place right up until shortly before starting. Furthermore, I explained that it's currently April and there's just no way to reasonably expect the hospital to emergency-credential two doctors who aren't starting work until September. In the time period between June and September I'll be working per diem, and we can comfortably pay the mortgage out of money from the sale of our current home plus my moonlighting income.

      I'm now hearing that the seller's agent is getting nervous because they think the mortgage is going to fall through. The sellers of course need to sell their house so they can buy their new house; not to mention it's a historic seller's market that is starting to turn.

      I'm getting progressively anxious and upset because I feel like the mortgage company doesn't understand how doctors' jobs work, and that their expectations for credentialing are unreasonable and unachievable. I've asked on several occasions for the mortgage transaction coordinator to communicate directly with the hospital onboarding specialist to figure out EXACTLY what the bank needs to confirm that we are in fact gainfully employed physicians. Somehow this has not happened. It seems that the mortgage company wants to see the magic words "all employment contingencies are fulfilled" but the hospital (very reasonably, I think) feels that they cannot actually say this since they haven't finished their credentialing process. But if KeyBank doesn't release the funds until the credentialing process is completed, we'll lose this house for sure. I'm actually afraid we'll lose our $48K deposit if that happens, plus appraisal and inspection fees, not to mention the immense amount of time spent on house shopping, preparing documentation, and everything else we've done.

      When we bought our first home in 2019 we had absolutely NO issues like this. The bank took our future contract, confirmed employment without our input, and disbursed the funds. I'm not sure why the due diligence has reached a level now that is essentially impossible to meet their requirements.

      Again, sorry for the wall of text! Have any of you dealt with this issue with physicians mortgage lenders? Or specifically with KeyBank? What do you suggest we do? I feel like I'm trapped in some kind of Catch-22-style bureaucracy with no way forward. The hospital person is going to talk with the mortgage person AGAIN tomorrow. I've also got a supervisor's contact info at the bank so I will escalate if this keeps going on. Our realtor says we're too deep into the process to switch lenders without the deal falling apart. I'm actually wondering if we need to lawyer up. What a freaking nightmare - if two doctors can't get a mortgage, who can? Would appreciate any suggestions you all could provide!!
      If you're using a WCI recommended mortgage agent and having trouble, be sure to let us know ASAP via email. Most of the time we can grease the kids and make sure things work out reasonably well. That really applies to any of our recommended folks (insurance, financial advisors etc).
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #33
        Originally posted by catch22 View Post
        ...My wife is a final year surgical fellow. ...

        ...her salary $320K+bonuses which escalates to $350K in second year and $380K in third year...
        This is downright terrible (saying this as a fellowship surgeon who trains fellowship surgeons). Big problem right there. That is below average for even basic general surgeons.

        If she is fellowship general, she should be well above that. Fellowship ortho WAAAY above that. If it's private prac for vasc or whatever, then it might start there but should go up MUCH faster than 30k/yr. If it's hospital employ job, it should start significantly higher. Is she working for a VA or univ hosp or something??? If so, that's her own fault, and it will hurt your finances for as long as you keep doing that.

        You guys are going to get railroaded if you keep spending borrowed money she hasn't made yet AND having her earn under avg for her training. Either alone aren't a killer, but both will be substantially effective at keeping you paying interest for decades and poking holes in your retirement boat. Fix it.

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        • #34
          Originally posted by The White Coat Investor View Post

          If you're using a WCI recommended mortgage agent and having trouble, be sure to let us know ASAP via email. Most of the time we can grease the kids and make sure things work out reasonably well. That really applies to any of our recommended folks (insurance, financial advisors etc).
          Hi! Thanks for offering to help! The latest mortgage coordinator has been communicative and helped us work it out. I think she’s also extremely extremely busy and I wouldn’t be surprised if they’re having understaffing issues like everyone else. But yes it was one of the people recommended on WCI and actually I had chosen them for that reason. I think we’ll be okay from here on out because we received our clear to close notice - fingers crossed!!

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          • #35
            Originally posted by catch22 View Post

            Hi! Thanks for offering to help! The latest mortgage coordinator has been communicative and helped us work it out. I think she’s also extremely extremely busy and I wouldn’t be surprised if they’re having understaffing issues like everyone else. But yes it was one of the people recommended on WCI and actually I had chosen them for that reason. I think we’ll be okay from here on out because we received our clear to close notice - fingers crossed!!
            Glad it's working out.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

            Comment


            • #36
              Originally posted by The White Coat Investor View Post

              Most of the time we can grease the kids . . .
              I have some kids I’d love for you to grease…

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              • #37
                Originally posted by MaxPower View Post

                I have some kids I’d love for you to grease…
                Podcast maybe?

                Comment


                • #38
                  Originally posted by Nash22 View Post
                  Add me to the list of people who is comfortable renting for the time being then pouncing on depressed list prices in the $700k range with cash when mortgages go to 10%. I imagine that will buy much more house in a few years than it does right now.
                  .
                  same here

                  Comment


                  • #39
                    Originally posted by MaxPower View Post

                    I have some kids I’d love for you to grease…
                    I had no idea what you were talking about for a minute....

                    We don't offer a hitman service, sorry.
                    Helping those who wear the white coat get a fair shake on Wall Street since 2011

                    Comment


                    • #40
                      Originally posted by catch22 View Post
                      Hello everyone!
                      I'm an internal medicine hospitalist and graduated in 2017. My wife is a final year surgical fellow. We're relocating for her new job and having some difficulties with our mortgage lender KeyBank. It's causing a great deal of stress and anxiety for us and I was hoping to get your thoughts. Sorry for the wall of text.

                      Current and future financial situation:
                      - We own our current home outright which is under contract for $320K ($~300K net to us after realtor fees), we have $105K in the bank, and ~$350K in retirement savings. We have NO student loan debt. We are in our early 30s. I make $300K base right now plus bonuses, total combined income about $420K/year currently.
                      - Future job start date Sept 2022, my future salary $240K+bonuses, her salary $320K+bonuses which escalates to $350K in second year and $380K in third year
                      - Under contract for a $1.2M home
                      - Mortgage is a KeyBank physicians loan, 10% down, 3.75% / 30 year with rate locked in until the end of June. Closing date is mid June.
                      - $48K already paid in deposit towards the home, with $72K due at close + closing costs.
                      - The mortgage stipulates that we can close within 90 days of employment start date, which is why we specifically timed our house hunt and closing date this way.

                      We are in what can only be described as a farcical, Soviet-like bureaucratic nightmare. The bank has both of our employment contracts and letters from the onboarding person at our new hospital confirming our employment and start dates. The mortgage documentation guy told us we'd just need to provide another letter from the hospital ~30 days prior to close as a good-faith status report on credentialing. This all sounded extremely reasonable. Credentialing paperwork came in April 2022 so we've filled out everything, provided references, prior malpractice certificates, etc. We both have totally clean records.

                      Suddenly about a week after we did our credentialing paperwork, we received word from our realtor that the seller's agent had never received a mortgage commitment letter from the bank. I called around to investigate and it turns out the bank has not provided this letter because they were expecting updated employment status from the hospital but they didn't ask us for it. Apparently they wanted another letter from the hospital stating income, start date, and any outstanding contingencies (i.e. credentialing).

                      At this point I discovered that the initial documentation guy has become basically incommunicado. He's not reachable anymore. He doesn't respond to my emails or calls. Now we have a new person who is handling the account, whose title is mortgage transaction coordinator.

                      The hospital provided yet another letter to the bank stating our start date, salaries, etc. They wrote that we've provided all documentation to proceed with credentialing, that the onboarding process is proceeding as planned, and that all credentialing contingencies had not yet been met but that they fully expect us to keep our start dates. This is all the truth. Credentialing is a months-long process that involves faxing and emailing all sorts of prior institutions like our residency programs, all prior malpractice carriers, etc, not to mention references from multiple busy physicians with lives of their own.

                      I'm currently being told that the bank underwriter doesn't want to clear the loan because the hospital basically hasn't said we are ready to start work. I spoke to the bank contact person and confirmed that she is in fact specialized in physicians mortgages and she told me that she's familiar with credentialing time frames. She also reassured me that the underwriter understands the nuances of physicians employment. She said that in her experience physicians are fully credentialed by the time they reach 90 days prior to job start date. I explained that at least in my experience this is usually not the case, and the credentialing often takes place right up until shortly before starting. Furthermore, I explained that it's currently April and there's just no way to reasonably expect the hospital to emergency-credential two doctors who aren't starting work until September. In the time period between June and September I'll be working per diem, and we can comfortably pay the mortgage out of money from the sale of our current home plus my moonlighting income.

                      I'm now hearing that the seller's agent is getting nervous because they think the mortgage is going to fall through. The sellers of course need to sell their house so they can buy their new house; not to mention it's a historic seller's market that is starting to turn.

                      I'm getting progressively anxious and upset because I feel like the mortgage company doesn't understand how doctors' jobs work, and that their expectations for credentialing are unreasonable and unachievable. I've asked on several occasions for the mortgage transaction coordinator to communicate directly with the hospital onboarding specialist to figure out EXACTLY what the bank needs to confirm that we are in fact gainfully employed physicians. Somehow this has not happened. It seems that the mortgage company wants to see the magic words "all employment contingencies are fulfilled" but the hospital (very reasonably, I think) feels that they cannot actually say this since they haven't finished their credentialing process. But if KeyBank doesn't release the funds until the credentialing process is completed, we'll lose this house for sure. I'm actually afraid we'll lose our $48K deposit if that happens, plus appraisal and inspection fees, not to mention the immense amount of time spent on house shopping, preparing documentation, and everything else we've done.

                      When we bought our first home in 2019 we had absolutely NO issues like this. The bank took our future contract, confirmed employment without our input, and disbursed the funds. I'm not sure why the due diligence has reached a level now that is essentially impossible to meet their requirements.

                      Again, sorry for the wall of text! Have any of you dealt with this issue with physicians mortgage lenders? Or specifically with KeyBank? What do you suggest we do? I feel like I'm trapped in some kind of Catch-22-style bureaucracy with no way forward. The hospital person is going to talk with the mortgage person AGAIN tomorrow. I've also got a supervisor's contact info at the bank so I will escalate if this keeps going on. Our realtor says we're too deep into the process to switch lenders without the deal falling apart. I'm actually wondering if we need to lawyer up. What a freaking nightmare - if two doctors can't get a mortgage, who can? Would appreciate any suggestions you all could provide!!
                      I just "love" how people who have never lived through communism like to make these comparisons so easily. I'd say you are right on point, except that the forms would be longer, you would be shuffled from office to office across town and would have to wait for hours just to have an uninterested office drone wave you off and if you started to make waves or complain, you'd get a visit from special services, a strong kick to the ribs (in the best case scenario). More to the point and not to abuse the analogy, please remember there were no free market transactions and no private ownership of real estate or business property in any sort of official/legal fashion in communism and that still exists in Cuba for instance.

                      That's why when I see USSR poster or Che Guevara in a local coffee shop, I find it personally offensive. Nazi symbolism is obviously off limits and for good reason; I do not get how the world's worst murderer (Stalin) or the hammer & sickle symbol of USSR is seen as anything but oppressive and evil. Not to be censured or removed from conversation as knowing history is important, but not in any way rationalized/mitigated or just smoothed over (like aforementioned Art Deco poster for USSR tourism and uncle Joe posters on the wall).

                      /End counter-rant

                      Comment


                      • #41
                        Originally posted by Tim View Post

                        "This is absolutely insane! Misinformation, deception, completely false! Reckless if not slander!" Again.
                        "you are living on a different planet." Your words and conclusions about me both from an ethical, legal and moral point of view are unhinged. You are projecting your experiences directly at me personally and it is ridiculous.
                        I am not in real estate, but I have bought homes and built one. Let's leave it at that.
                        What in the world are you talking about?
                        It is fairly obvious that you own a home that has appreciated dramatically in value over the past 2 years and are very upset at any suggestion that this might not be natural and sustainable as you have unrealized gains. You are not alone in thinking and reacting in this way. I see it a lot, and the outbursts from property owners when they hear the B-word give me all the more confidence that this will all implode fantastically.
                        I suspect, that if you were to realize your gains and downsize or move to a rental, your thinking about the current situation might change.

                        Real estate agents, like stock brokers, make their money from transactions.
                        The correct financial answer to "should I buy now" or "should I sell now" to a realtor will always be yes. The correct ethical answer may be different, given that the agent was hired to help the client find the best possible deal for them in the market, when the client could have simply not consulted an expert's advice and made their best decision with an amateur's assessment of the marketplace. That is why they were hired. That was their added value. Yes, they are culpable if they are telling naive people to buy houses in an environment that is clearly laden with volatility and artificial market forces that would put these people at unusually high risk.

                        I heard yesterday at a BBQ about the host's friend who is a realtor who made over 700k last year.
                        On a forum of physicians who spent a decade in training, it is somewhat disconcerting that you would take the side of a sleazy cutthroat profession with minimal barriers to entry where people typically make 50k a year if they're lucky and now it's not shocking to hear them boasting about making more than many of us, especially in an environment where the houses sell themselves. It should come as no surprise that one of the leading indicators, as was seen in 2008, of housing bubbles, is a dramatic rise in the number of realtors and how much money they are making.
                        Last edited by Nash22; 05-01-2022, 11:07 PM.

                        Comment


                        • #42
                          Originally posted by Max Power View Post
                          This is downright terrible (saying this as a fellowship surgeon who trains fellowship surgeons). Big problem right there. That is below average for even basic general surgeons.

                          If she is fellowship general, she should be well above that. Fellowship ortho WAAAY above that. If it's private prac for vasc or whatever, then it might start there but should go up MUCH faster than 30k/yr. If it's hospital employ job, it should start significantly higher. Is she working for a VA or univ hosp or something??? If so, that's her own fault, and it will hurt your finances for as long as you keep doing that.
                          What about breast fellowship who only does breast? Those numbers seem about right, if not good, for what I have heard for those who do 100% breast. Am I wrong?

                          Comment


                          • #43
                            Originally posted by braindoc View Post

                            same here
                            3rd.

                            'Patience is bitter - but its fruit is sweet'

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                            • #44
                              Originally posted by catch22 View Post

                              Hi! Thanks for offering to help! The latest mortgage coordinator has been communicative and helped us work it out. I think she’s also extremely extremely busy and I wouldn’t be surprised if they’re having understaffing issues like everyone else. But yes it was one of the people recommended on WCI and actually I had chosen them for that reason. I think we’ll be okay from here on out because we received our clear to close notice - fingers crossed!!
                              Did you close in time?

                              Comment


                              • #45
                                Hey folks
                                They told us we were clear to close about a month ago. Last week I signed the closing disclosure form stating $87,000 cash to close which was exactly what had been previously estimated. However, suddenly today, without warning, I received another closing disclosure stating that cash to close is now $97,000. It appears that they’ve increased the property tax in escrow from 3 months to about 9 months. I’ve emailed and called but haven’t heard back about why this was done. It seems like very poor form for them to suddenly increase the cash to close by so much, without warning. We can cover the difference, but what the heck? Is this normal?? I can imagine many people without doctors incomes would be totally blind-sided by this kind of erratic behavior from the bank. We are supposed to close on June 16. We were also told by the seller’s lawyer that the bank wouldn’t release funds until they had closing confirmation from the sale of our current home. That was TOTALLY not part of any of the conditions of the mortgage. Thankfully our current home closes on June 14. But the lack of communication has been really impressive
                                Last edited by catch22; 06-10-2022, 09:51 AM.

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