Dealing on Both Sides of the Atlantic

Written by admin on August 6, 2009 – 2:05 pm -

For a variety of reasons, I’ve been splitting my time between Paris and Washington, D.C., and traveling as much as possible.  When I lived exclusively in France, I was convinced everything was so easy in the U.S. How wrong I was. Waiting for Comcast Cable Company’s technician can cause any sane person to become cranky. Workmen don’t show up in the U.S. They don’t show up in France. But in Paris, they usually call and when they appear, my experience has been the French tend to be more competent.  I may have to revise my thinking.

This year, I’ve had the pleasure of refinancing two apartments and neither has been easy. With interest rates at an all time low in the States, it only seemed logical to opt for a lower rate that would reduce my monthly payments by $200.

Why not take the path of least resistance and request a new mortgage from the bank that’s holding the current one? It knows you, your payment history, and when you brush your teeth.  I called JPMorganChase and proceeded to get the run-around from hell.

A young man (and I do mean young) “sold” me the mortgage while another man’s job was to implement it. The problem was that the two appeared to have zero communications and the right hand had no idea what the left one was doing, including a discrepancy in interest rates, points and when and where settlement would be.

Thank goodness I had a file for each and every email and resorted to sending blind copies to a Bonjour Paris faithful who’s an owner of Heritage Title & Escrow Company. What I didn’t know was that Rachel was on vacation and was overwhelmed when she opened her email box to what many people would have reported as spam.

In the U.S., there are title companies, mandatory inspections, fees, and taxes to pay. I forgot to add that in order to get a quote for a mortgage, I had to pay $700 for the privilege, a portion of which would be applied if the mortgage were executed. When I ached to tell Chase where to go, I remembered that $700. I also remembered that banks are in the business of making money—and receiving bailouts.

When I reminded the friendly representative from Chase the apartment had been appraised not so many years ago and considering it’s in a building that has 256 units, no one could say they’re weren’t comparables. The response was they were sorry but a physical inspection was mandatory (considering the downturn in the housing market and the sub-prime calamity) and thank you very much but the appraisal fee is $500—no ifs, ands, or buts.

After the appraiser called and questioned me for an entire five minutes, I felt my defensive side rising. Because he was so familiar with the building, he said there was zero reason to bother me, I noted his name and phone number and off went yet another e-mail saying I was not going to pay $500 for an on-site visit.

You get the picture. The closing did happen and thank goodness Rachel was there to catch some tiny mistakes—such as my deceased husband wasn’t owner of the apartment and never had been. Oh well.

Moving right along. It was time to refinance the mortgage on the Paris apartment. When we took out a mortgage, the euro was worth eighty-seven cents. Who would have imagined that seven years later the dollar wouldn’t have a heck of a lot of buying power in the EU?

Happily, since the mortgage was only for fifteen years, a significant amount of the loan had been paid.  That’s when I met Sébastien at HSBC.  That was good, because the bank that held the mortgage had become an internet bank called Boursarama with no Paris office and evidently (as you will see) no brains. There are times when human contact counts for a lot.  There is not a time when lack of brains is useful

My lawyer, Tim Ramier, contacted Boursarama to see if they would offer a rate comparable to HSBC’s and, if not, what they would want by way pre-prepayment penalty.

Maître Ramier had my power of attorney and acted for me.  He received a letter from Boursarama that I did not qualify for a new loan at a lower rate because the value of the American dollar had recently sunk against the euro.  Note that Boursarama and its predecessor had been receiving monthly payments on my current property and another property I sold in Provence for eighteen years—monthly payments that were about twice as high as the new payment I would pay if they agreed to refinance my loan.

So tell me, anyone, what do you make of this?  The bank felt secure with me paying x euros a month—evidently, I’m good for it.  But if I were to pay one-half x euros a month, that would be a risk they cannot accommodate.  It would?  How?

What is wrong with this picture?  France isn’t wallowing in sub-prime mortgages because people don’t move often, few have the American need to keep up with the Joneses, and if you have a French mortgage, you’re required to pay mortgage insurance. As I’ve said before, banks don’t want to have real estate departments and the ones that found themselves in financial pickles were institutions and pension funds that invested in U.S. real estate.

When I receive e-mails asking advice about real estate, mortgages, visas and more, people must think I’m taking the easy way out since I invariably say they should obtain professional advice.

No transactions are the same. Countries, not to mention regions, have different rules and regulations.

When, however, you are dealing with illogic—or brainlessness as I see it, I doubt any amount of expertise will do any good.  Patience.  Deep breathing.  Meditation.  Ommmm.

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Posted in Around the World, Paris |