Friday, February 19, 2010
In their own words...
I contacted several SunTrust employees that were soliciting business for new construction loans. I outlined exactly what happened to us without naming the lender and here are some of their responses:
"Wow, that sounds like a very tough situation (to put it mildly). So many of the things that you mention went so far against all of the checks and balances that we have and if any of them were implemented (safeguards, that is) you would not be in the position you are in now." but we’ll be happy to show you how the other side of the lending fence does business."
"Wow, what a nightmare."
"Yes we require an inspection before every draw. We start with a draw schedule and go off of percentages. The inspector releases items as they are complete, such as footings, foundations, roof, etc. You are responsible for paying for change orders as they occur. 10 draws is excessive and 26 is ridiculous. No we only fund after work is completed. We have to approve the builder ahead of time with references. I can’t answer why the bank would not go after them. I just don’t understand why they would pay him for work that was not completed."
"I firmly believe that you are victims of an extreme situation – almost “smells” like collusion. Do you have a good attorney????? This is truly horrible, and I am sorry you have been involved in such a debacle. Essentially, draws are based on percentage of work completed, and not on materials delivered, etc."
"I regret to hear of your construction to permanent loan loss. I can say I’ve never heard of anything like this in 30 years of business experience. We do not disburse funds to the builder for the very reason of funding another project.
1.NO – we require the Builder sign an addendum to the builder’s contract that would include STM.
2.We check out the builder’s permit and how he pays subs.
3.We require an inspection $100.00 each and do not fund until appraiser states complete (if he orders lumber he is not paid until framed) STM and appraiser keep a percentage of completion chart which must be followed.
4.We do not disburse for up grades – you pay the difference.
5.We have a construction lending department which keeps tight control of draws
6.Draws are limited to usually once a month; builder can draw 10% up front to establish his cash flow."
"I can certainly understand all your current problems and in a lot of ways more than you will ever know. We have a complete construction department that has been set aside because of all the problems that people have experienced in the past and we now take the application here locally and then send the file to Gainesville to the department for processing, underwriting, approval of the builder and that way they stay on top of things from the start to finish. It is unfortunate that things like this happen but with all the changes that we have gone though I think that we have put a lot of things in place to help people not have to go through things like you and have I."
"Hi Cat. Oh…. I am so sorry! I know you must be devastated. Take it from me though that there are other families in similar scenarios as you all.
In years past, there were several construction perm “programs” that were way too aggressive. Although they sounded perfect at the time, the unfortunate part is that buyers, builders & lenders are NOW realizing that it wasn’t well planned out. Builders began having a hard time obtaining financing on the business end, they relied on the customer’s money for the cost building (c-p loans) and the, c-p programs were too aggressive. The other biggie is that no one expected such a declining market or prepared for the “long term”. So …..I’m saying all of this so you will not beat yourself up…it’s been a tough year. I’m glad you emailed and will be honest with you with what I know.
Direct disbursement to the Builder??? No maam. You are in control of the funds. They are released to YOU unless you would like for them to be released to YOU and the builder (I strongly suggest the disbursements go to only you).
We give YOU to money and you give it to the builder.
We do not disburse funds to YOU until we are sure the work is complete and there are normally 5-6 inspections and disbursement so the disbursements and completed work in monitored often.
We distribute the amount per the draw schedule, plans, specs and proof of completion of each stage.
Unbelievable.
The builder had too much control of your build AND loan. You need to be in control of when your money is disbursed and it needs to go to you directly. When you are satisfied with the builders work & inspection is satisfactory, THEN you can give the builder the funds.
Lenders have to be careful with the lawsuits and the documents usually read that you can choose the builder (however, SunTrust requires that the builder you choose provides quite a bit of documentation about their business, providing references, credit checks, etc) to minimize as much risk for you as possible."
I’m so sorry about your experience. It should NOT be that way."
"I’ll have to add that we’ve had more changes in our industry in the last 18 months than I’ve seen in all my previous years in this industry and it’s a continually refined set of guidelines that we have to keep up with and understand. Many lenders have dropped their construction programs all together.
Yes but it’s the customers choice whether they want to disbursements to come to them or the builder. I personally always suggest they only go directly to the customer’s account so if you are not satisfied with anything in the process you have the power of control on your side in negotiating with your builder.
We require invoices before all work is paid for.
That is the most extreme I’ve heard!"
"WOW! That does indeed sound like a nightmare.
I have done probably over 100 builds in this area. I have been with Suntrust for 22 years and have a great deal of experience on cp loans. Our CP program has changed a lot and has gotten a great deal more conservative.
Here are some of the basics:
These loans are funded out of Gainesville GA. We have a strict draw schedule that we adhere to and fund based on level of completion. We do require inspections, that being the indicator of what is funded.
We generally only do 4 to 5 draws."
"This makes no sense whatsoever. Draw schedule is established. Inspections are provided by us only upon inspection and work actually finished and completed to schedule would funds be dispersed. Period. This would never happen with a CP lender of reputation. This makes no sense. We would just not give money away to a builder without work being done. The inspectors and people involved are professionals and spot on. Flexibility is part of any construction process and financing. But an error of this magnitude I have never heard of. Not with me. And I have done many. 65% completed and 95% of funds dispersed – this makes no sense and awfully fishy.
Remember you are “our” client not the builder. The builder has to be approved by us to make sure he is legal and above board. It’s your money – your house – the funds can be dispersed to you who then can provide them to the builder. But we are not going to disperse funds to anyone unless the work on the schedule is completed. We protect our investment and our clients.
Remember any lender is not only protecting the client. They are also protecting their own self interest. What good would it do if the clients project was not finished and the client walked away?? The bank would have a mess on their hands and a foreclosed property that is “unmarketable.” No we do not require the funds go to the builder. Of course safe guards are in place. We make sure the builder is legit – then we look at the contracts, draw schedules – and disperse money only for what is done.
This would never happen with us. We make sure releases are provided as the project is being completed. Yes, some builders squawk. But this is why we do it our way – so we don’t have these messes. Our Construction people are pretty smart. You may have done this once or twice we have done thousands….That is why you come to us. Not just for financing but piece of mind.
Craziest thing I ever heard. Who was your lender….Scams are Us? Is this for real? Are you putting me on?
This is the craziest thing I ever heard of. I am doubting the “reality” of your letter. You do not even include your phone number.
If you want to understand CP financing and work with a real lender call me to discuss.
I’m sorry about your situation (if this letter is even real)."
"Wow, that sounds like a very tough situation (to put it mildly). So many of the things that you mention went so far against all of the checks and balances that we have and if any of them were implemented (safeguards, that is) you would not be in the position you are in now." but we’ll be happy to show you how the other side of the lending fence does business."
"Wow, what a nightmare."
"Yes we require an inspection before every draw. We start with a draw schedule and go off of percentages. The inspector releases items as they are complete, such as footings, foundations, roof, etc. You are responsible for paying for change orders as they occur. 10 draws is excessive and 26 is ridiculous. No we only fund after work is completed. We have to approve the builder ahead of time with references. I can’t answer why the bank would not go after them. I just don’t understand why they would pay him for work that was not completed."
"I firmly believe that you are victims of an extreme situation – almost “smells” like collusion. Do you have a good attorney????? This is truly horrible, and I am sorry you have been involved in such a debacle. Essentially, draws are based on percentage of work completed, and not on materials delivered, etc."
"I regret to hear of your construction to permanent loan loss. I can say I’ve never heard of anything like this in 30 years of business experience. We do not disburse funds to the builder for the very reason of funding another project.
1.NO – we require the Builder sign an addendum to the builder’s contract that would include STM.
2.We check out the builder’s permit and how he pays subs.
3.We require an inspection $100.00 each and do not fund until appraiser states complete (if he orders lumber he is not paid until framed) STM and appraiser keep a percentage of completion chart which must be followed.
4.We do not disburse for up grades – you pay the difference.
5.We have a construction lending department which keeps tight control of draws
6.Draws are limited to usually once a month; builder can draw 10% up front to establish his cash flow."
"I can certainly understand all your current problems and in a lot of ways more than you will ever know. We have a complete construction department that has been set aside because of all the problems that people have experienced in the past and we now take the application here locally and then send the file to Gainesville to the department for processing, underwriting, approval of the builder and that way they stay on top of things from the start to finish. It is unfortunate that things like this happen but with all the changes that we have gone though I think that we have put a lot of things in place to help people not have to go through things like you and have I."
"Hi Cat. Oh…. I am so sorry! I know you must be devastated. Take it from me though that there are other families in similar scenarios as you all.
In years past, there were several construction perm “programs” that were way too aggressive. Although they sounded perfect at the time, the unfortunate part is that buyers, builders & lenders are NOW realizing that it wasn’t well planned out. Builders began having a hard time obtaining financing on the business end, they relied on the customer’s money for the cost building (c-p loans) and the, c-p programs were too aggressive. The other biggie is that no one expected such a declining market or prepared for the “long term”. So …..I’m saying all of this so you will not beat yourself up…it’s been a tough year. I’m glad you emailed and will be honest with you with what I know.
Direct disbursement to the Builder??? No maam. You are in control of the funds. They are released to YOU unless you would like for them to be released to YOU and the builder (I strongly suggest the disbursements go to only you).
We give YOU to money and you give it to the builder.
We do not disburse funds to YOU until we are sure the work is complete and there are normally 5-6 inspections and disbursement so the disbursements and completed work in monitored often.
We distribute the amount per the draw schedule, plans, specs and proof of completion of each stage.
Unbelievable.
The builder had too much control of your build AND loan. You need to be in control of when your money is disbursed and it needs to go to you directly. When you are satisfied with the builders work & inspection is satisfactory, THEN you can give the builder the funds.
Lenders have to be careful with the lawsuits and the documents usually read that you can choose the builder (however, SunTrust requires that the builder you choose provides quite a bit of documentation about their business, providing references, credit checks, etc) to minimize as much risk for you as possible."
I’m so sorry about your experience. It should NOT be that way."
"I’ll have to add that we’ve had more changes in our industry in the last 18 months than I’ve seen in all my previous years in this industry and it’s a continually refined set of guidelines that we have to keep up with and understand. Many lenders have dropped their construction programs all together.
Yes but it’s the customers choice whether they want to disbursements to come to them or the builder. I personally always suggest they only go directly to the customer’s account so if you are not satisfied with anything in the process you have the power of control on your side in negotiating with your builder.
We require invoices before all work is paid for.
That is the most extreme I’ve heard!"
"WOW! That does indeed sound like a nightmare.
I have done probably over 100 builds in this area. I have been with Suntrust for 22 years and have a great deal of experience on cp loans. Our CP program has changed a lot and has gotten a great deal more conservative.
Here are some of the basics:
These loans are funded out of Gainesville GA. We have a strict draw schedule that we adhere to and fund based on level of completion. We do require inspections, that being the indicator of what is funded.
We generally only do 4 to 5 draws."
"This makes no sense whatsoever. Draw schedule is established. Inspections are provided by us only upon inspection and work actually finished and completed to schedule would funds be dispersed. Period. This would never happen with a CP lender of reputation. This makes no sense. We would just not give money away to a builder without work being done. The inspectors and people involved are professionals and spot on. Flexibility is part of any construction process and financing. But an error of this magnitude I have never heard of. Not with me. And I have done many. 65% completed and 95% of funds dispersed – this makes no sense and awfully fishy.
Remember you are “our” client not the builder. The builder has to be approved by us to make sure he is legal and above board. It’s your money – your house – the funds can be dispersed to you who then can provide them to the builder. But we are not going to disperse funds to anyone unless the work on the schedule is completed. We protect our investment and our clients.
Remember any lender is not only protecting the client. They are also protecting their own self interest. What good would it do if the clients project was not finished and the client walked away?? The bank would have a mess on their hands and a foreclosed property that is “unmarketable.” No we do not require the funds go to the builder. Of course safe guards are in place. We make sure the builder is legit – then we look at the contracts, draw schedules – and disperse money only for what is done.
This would never happen with us. We make sure releases are provided as the project is being completed. Yes, some builders squawk. But this is why we do it our way – so we don’t have these messes. Our Construction people are pretty smart. You may have done this once or twice we have done thousands….That is why you come to us. Not just for financing but piece of mind.
Craziest thing I ever heard. Who was your lender….Scams are Us? Is this for real? Are you putting me on?
This is the craziest thing I ever heard of. I am doubting the “reality” of your letter. You do not even include your phone number.
If you want to understand CP financing and work with a real lender call me to discuss.
I’m sorry about your situation (if this letter is even real)."
Wednesday, February 17, 2010
Ceramic Tile, what ceramic tile?!
In April 06 SunTrust gave the builder $18,720 for ceramic tile. The corresponding inspection report showed that there was no tile installed.
In Feb 09 they gave him an additional $4,640 for a total of $23,360 for ceramic tile. Every inspection report, including the last one, shows that there is 0 ceramic tile in the house.
There is not one single tile of any sort in our house but SunTrust paid the builder $23,360! What is wrong with this picture?!
Sunday, February 14, 2010
No Valentines dinner out this year.
Because of our finances, we do not eat out anymore, (unless family is taking us out). It has been over a year since hubby and I had "date night". I was feeling a little down about it today, especially because of Valentine's Day.
I have the best kids in the world, I am so blessed! My 14 yr old daughter prepared a 5 course dinner from scratch. My kids gave us a romantic dinner for two that was better than any 5 star restaurant.
Romantic table setting with candles. French onion soup, mixed green salad, bread sticks, steak au poivre, au grautin potatoes, roasted broccoli, dinner rolls, onion rings, molten chocolate cake with vanilla bean ice cream. Everything was from scratch! My daughter cooked for us all day. My 9 year old son was the most attentive waiter I have ever had, he even sampled everything for us including drinking directly from the water pitcher.
Who needs money and a fancy restaurant when you have kids like this?!!!
I REALLY have been blessed...
I have the best kids in the world, I am so blessed! My 14 yr old daughter prepared a 5 course dinner from scratch. My kids gave us a romantic dinner for two that was better than any 5 star restaurant.
Romantic table setting with candles. French onion soup, mixed green salad, bread sticks, steak au poivre, au grautin potatoes, roasted broccoli, dinner rolls, onion rings, molten chocolate cake with vanilla bean ice cream. Everything was from scratch! My daughter cooked for us all day. My 9 year old son was the most attentive waiter I have ever had, he even sampled everything for us including drinking directly from the water pitcher.
Who needs money and a fancy restaurant when you have kids like this?!!!
I REALLY have been blessed...
Saturday, February 13, 2010
New to all this
To all my social networking friends,
I am a little lost... I could use all the help I can get getting the word out about my experience with SunTrust. I think this might be bigger than the the three families, including my own, that I know about. Between just the three of us we have almost 8 million dollars at stake. If that is the number for just three, imagine how big this could be if it is more widespread!
Please help me in getting the word out, there may be many more hurt.
I am a little lost... I could use all the help I can get getting the word out about my experience with SunTrust. I think this might be bigger than the the three families, including my own, that I know about. Between just the three of us we have almost 8 million dollars at stake. If that is the number for just three, imagine how big this could be if it is more widespread!
Please help me in getting the word out, there may be many more hurt.
Thursday, February 11, 2010
Stay tuned....
I will be posting more recent pictures of the house shortly. This is a picture of our front door. Nice huh? SunTrust gave the builder 28k for the exterior doors, do you think the inspector missed something?
Notice the stately walkway up to the front door. Uh-oh, there is no walkway up to the door! In fact, there are no walk ways and the driveway is still incomplete. SunTrust paid for a 90% completion level. THEY GAVE OUR BUILDER $18,240 BACK IN 2006 FOR THE DRIVE AND WALKWAYS. The funny thing is that the house was only in the foundation stage at that time and there were ZERO walks and driveways! Our loan administrator originally gave an allowance of 2% for this line item and funded 1.14% back in April of 2006. After paying the builder over 18k, she then later changed the allowance to 1% and showed it to be 90% complete. 90% completion of 1% of the loan comes out to $14,400. Where did the money go?
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