Massive Problems with DRB! Don\'t use!

[MarkV]

Hey All,

Has anyone else been having massive problems with DRB? I submitted all my paperwork almost 4 MONTHS AGO and still no response! Occasionally I get an email saying something is pending but after calling their office am told everything is in order and it is just their computer system sending this periodic message. Nonetheless, they have now run my credit twice (my wife and I are both co-signers on each other's refi applications) and have not had any offers yet. I completely understand DRB is a small bank and they were inundated with refi applications but almost 4 months is ridiculous. If they were overwhelmed than they should not have run our credit. I want to switch to another bank but quite frankly cannot afford another two hits on my credit. Any suggestions or ideas? Have you had better luck with some of the other refi banks recently (as in the last 3-6 months?)

 

[MrsIMDoc]

I applied February 15 without a cosigner. I called multiple times and they had multiple problems with my application. At one point they said that I needed INS verification because their system had me listed as a foreign citizen (I have never lived outside the US). Finally on April 19 I received notification that I was approved and they are drafting my final documents. However, I still have not received these documents.  It seems like they are overloaded...

[YYjames]

Can't comment on DRB specifically but industry wise these student loan refiers are having ALOT of issues getting capital to serve their customers. So much so that SoFi recently had to open a fund to then invest in their loans. Remember, majority of their capital is coming from giant pension funds, hedge funds + these guys are leveraged.

They will move the cue but if capital providers get spooked then expect longer delays.

Macroeconomically, these platforms are headed to failure or massive consolidation.

I could write a whole research article on their current issues, but yawn...I don't run WCI

 

[The White Coat Investor]

Mark- Email me if you want me to forward your name on to my contact at DRB and see if he can help. If you're a resident, you don't have much other option. If you aren't, there are plenty of other choices and I wouldn't worry too much about the hit.

[The White Coat Investor]

YYjames wrote:

Can’t comment on DRB specifically but industry wise these student loan refiers are having ALOT of issues getting capital to serve their customers. So much so that SoFi recently had to open a fund to then invest in their loans. Remember, majority of their capital is coming from giant pension funds, hedge funds + these guys are leveraged.

They will move the cue but if capital providers get spooked then expect longer delays.

Macroeconomically, these platforms are headed to failure or massive consolidation.

I could write a whole research article on their current issues, but yawn…I don’t run WCI

 

Click to expand...

You can still submit a guest post on the subject if you like. But I can assure you WCI readers are getting refinanced every month. SoFi updates me regularly and have refinanced over a hundred of you this year so far and that's just one of them.

They can obviously all afford to be picky though. They're in the business to get the good borrowers, that's why they're after docs and residents. The less good you are, the less you should be surprised that your application is taking a long time. They're not the federal government; they won't lend to anyone who wants money. This is particularly the case for residents where DRB essentially owns a monopoly right now. Thousands of interns have private loans they should refinance if they can. There's plenty of room in this market for more players.

[YYjames]

Do not think the delay in time is due to a credit decision dilemma. Whether you are a good borrower or not is decided pretty quick. They want to "eek" you in and for that they need capital.

I speak as somebody close to funds that invest in these loans.

Eventually they do get the money to fund these, so to original posters - it will happen don't worry.

 

[The White Coat Investor]

YYjames wrote:

Do not think the delay in time is due to a credit decision dilemma. Whether you are a good borrower or not is decided pretty quick. They want to “eek” you in and for that they need capital.

I speak as somebody close to funds that invest in these loans.

Eventually they do get the money to fund these, so to original posters – it will happen don’t worry.

 

Click to expand...

Yes, funds are limited for sure. But what alternatives do you have? One good reason to apply with multiple lenders if you can.

[shantster]

I applied back in early December and received an offer roughly a month later. It took until the end of March for the paperwork to finally be sent to me. This was after multiple inquiries about the status of the paperwork and having them make my application a "priority" due to the constant requests. They noted delays due to high volume for loan refinancing.

If they are hitting limitations of funds (I believe LendKey suspended applications due to funds when I was applying), they may be more selective for who they will offer refinancing.

[Zaphod]

I hope SoFi isnt having similar issues, I just attempted to ReFi with them as rates are again lower than last year. Hope it doesnt take too long. Sofi seems to be the biggest baddest out there, and I've been starting to become concerned about counterparty risk with these stories.

[jhawk]

According to their website, it looks like DRB has increased their refi rates dramatically. Rates now starting at 4.7% (fixed) and 4.17% (variable). The rates for the resident/fellow program is even higher, starting at 6.25% (fixed) and 5.02% (variable) for 7-year terms.

[shantster]

jhawk wrote:

According to their website, it looks like DRB has increased their refi rates dramatically. Rates now starting at 4.7% (fixed) and 4.17% (variable). The rates for the resident/fellow program is even higher, starting at 6.25% (fixed) and 5.02% (variable) for 7-year terms.

Click to expand...

Wow. I'm happy that I refinanced when I did as my rate as a resident is near their normal rate.

 

They need to update their ads. The one that shows up at the same point as your post says that rates start at 1.90%. That's some false advertising!

[YYjames]

False advertising indeed.

 

[The White Coat Investor]

I emailed DRB today about the rate change and the reply was basically this:

The low end of our advertised rates and that of our competitors has stayed static for the last year even as the Fed has raised rates and even as investors have demanded more return for taking on the risk entailed in loans like these. As such, a smaller percent of applicants have been getting the lowest advertised rates from lenders in this space. In an effort to be more transparent, DRB has decided to increase the advertised rates to be more in line with the actual rates offered to our applicants at this time. We think it is only a matter of time for other lenders to follow suit. It is worth noting that we still have very competitive rates compared to other lenders. If you look at the average rates on our loans in recent public loan securitizations compared to other lenders, you will see that our borrowers are paying a significantly lower rate compared to that of our competitors.

They also sent me data from last Fall showing their average loans are lower than most of their competitors:

• DRB 4.97%


• SoFi 5.53%


• Earnest 5.41%


• Common Bond 5.90%

That's the average of their fixed loans, all terms, and not including ACH. So the rates look pretty good (and that's who my business manager refinanced hers with) but there's no doubt I get more complaints about DRB as far as time it takes to go through the process than anyone else.)

So although they're advertising higher rates, I don't know that the actual rates people are getting (at least on average) are any different for this month than they were last month.

Common Bond told me recently they've lowered their rates, so hopefully that brings them in line with everyone else.

Obviously it's hard to get excited about going from 6% to 5.5% though. Those ~2% 5 year variable rates were pretty awesome while they lasted.

[The White Coat Investor]

Another interesting thing in that data is the breakdown of FICO scores: 28% over 800, another 23% over 780 an another 18% over 760. <18% under 740. They want the good bets and even a 740 isn't going to impress them.

[YYjames]

5.5% (average) not too far from 6.8%

I'll call it the interest / greed creep

Still better I suppose if you can qualify for sub 4.5%