Freedom Financial Services

Initial mistakes followed by really impressive accountability, followed by gross and dangerous incompetence. Initially my wife and I contacted Freedom to finance an investment duplex that we had previously purchased for cash and remodelled. We dealt with Kari Havenar, who was excellent in every regard except for one small gap in knowledge that Freedom went above and beyond to remedy the consequences of. It turns out that Fannie Mae currently has a rule that they will not buy loans for which the debtor takes cash out of an investment property if they already have four or more mortgages. It had been disclosed to Freedom up front that we already had four mortgages on various properties, and that this duplex was not mortgaged – thus, any financing of it would necessarily be ‘cash out’. Thus, Kari’s considerable efforts were very prompt, courteous, etc., but all for naught, since they only do ‘Fannie-qualified’ loans. Although we might not expect an individual loan salesperson to know all the ins and outs of Fannie’s ever-changing rulebook, I thought someone along the way on the mortgage broker’s end should know that they are trying to sell something they cannot provide. They had us pay for a $500 appraisal before they figured it out. So they get low marks for wasting our time providing oodles of documents for the underwriters, but they get high marks for making it right in the end – at least monetarily. Freedom agreed that they should have known better, and they ATE THE APPRAISAL. No other mortgage company that I have ever dealt with would do that, I think. It is indirect consequential damages of a mistake, and they had no legal requirement to absorb it. They did the right thing. That outstanding accountability earned them an “A” even after deducting for having wasted our efforts on the duplex documentation. We went ahead and re-financed our primary residence with them instead. Everything went as promised through the close, and the rates were among the lowest we could find, including fly-by-night internet companies. I couldn’t recommend any mortgage broker higher than Kari Havenar. Our credit reports are very important to us. We have spent a great deal of effort making sure that our credit reports reflect that we do what we say we will do, when we say that we will do it – that we are good for our word. We are rewarded by low insurance rates and cheap financing. This is why Freedom’s next mistakes became upsetting when they seemingly put it at risk. We received our first statement for the mortgage on or about May 27, with a due date of May 1 – obviously missed. The postmark was mid-to-late May, which I pointed out when I called Freedom. Note it wasn’t a late notice, but rather a regular statement, sent way after the due date. I was told not to worry about the credit reporting, as they don’t report anything for the first 60 days of a new loan. I went ahead and scheduled the payment via ‘bill pay’ for three regular monthly payments (May 1, Jun 1, Jul 1) plus the May late fee, for the first date it could arrive – 01-Jun. It posted to my bank and appears on my statement as an Automated Clearing House (ACH) (i.e. instant) transaction on (Wednesday) 01-Jun-2011. Theory: Problem solved – one 31-day-late payment (while they aren’t reporting it), a late fee, and two on-time payments to cover until they can get the paper sold to whomever will ultimately service the loan, when I will start reliably receiving statements, set up auto-pay, etc. Reality: Freedom didn’t post the payments until 03-Jun-2011 (Friday). They sent us an undated “Final Notice”, postmarked by their Pitney Bowes postage machine 02-Jun-2011, for May 1 and Jun 1 payments. When I received it around 10-Jun, I ignored it, since I knew they had been paid 01-Jun, and probably were just a day late in posting. Then on 28-Jun, I received the certified letter, postmarked 10-Jun-2011 by their own Pitney Bowes postage machine, but dated 03-Jun-2011. It stated that we were in default; payment must be made by July 8 in certified funds or they would immediately accelerate the principal and sell our property; followed by a foreclosure deficiency judgment wherein they would come after us for the difference after they wastefully sell our home at auction, etc., etc. This is where they reversed the course of their Angies List rating. L If you are going to give someone 35 days from the date of your letter to send you certified funds, “or else”, you shouldn’t let the letter sit around on your desk for a week before you bother to even stamp it, much less actually getting it to the post office, where you must take it to send it certified. Or better yet, don’t send nasty demands and threats to people who have already paid you ten days earlier (and two days before you printed the letter. Or even better still, post payments when you receive them, or even the next business day. Still even better: send a doggone statement in the first place like you said you would, and the first payment would have never been late, much less any others (oh yeah… none of the others were late anyway… forgot that part for a moment). Getting a letter like that is very upsetting, even when you know you are in the right – things get out-of-hand, lenders cut corners on processes, houses really do get improperly foreclosed upon (google “robo-signing” or “improper foreclosures” to read about tens of thousands of foreclosures just being pushed through the process illegally without ensuring they are proper) – that is a scary threat for people, and there really were so many opportunities for Freedom to not cause it to happen. If Freedom had done a single one of the above suggestions – every one of which we have a right to expect, they wouldn’t have made my wife cry with the results of their incompetence. Fortunately I called them in response to this. Otherwise, I wouldn’t have know that they were expecting another payment on 01-Jul , in spite of me already having paid it. Recall that they received it on 01-Jun, but posted it on 03-Jun. When asked why they would post a payment that they allegedly received on 03-Jun, that was in the amount of the late fee from May, plus exactly three times the monthly payment, with July’s payment now less than 30 days away, to “additional principal” they really couldn’t come up with an answer. I’ll just call this one “icing”. I explained that they were paid July’s payment well in advance because they were not sending statements in a timely manner and I wanted to protect my credit rating. They corrected the accounting – or at least told me so. As far as I know, all is back on track, and we will set up automated payments so that timeliness for whatever invoicing they do is irrelevant. We have checked our credit reports, and they did tell the truth about the non-reporting of the late payment, as our credit scores are still 806 and 790, which they couldn’t be with a >30 day late payment. One item in Freedom’s defense: I believe their loan servicing (which is where nearly all of our problems were) is farmed out to a third party – Dovenmuehle Mortgage, Inc. But Freedom contracted with them, and I’m sending payments to “Freedom Financial Services”, so Freedom is where the responsibility lies. Don’t hire incompetent firms to do your work in your name and expect not to be held accountable for their malfeasance. I am eager for Freedom to sell our loan. If I had some reason to believe they had their act together on the servicing end, or if I knew they would immediately sell the paper, I would consider doing business with them again, due to their superb service in every other regard besides servicing. But not otherwise. [Update 17-Jul-2011] New Twist: As part of the process on the original mortgage on the duplex, Freedom had themselves added to my insurance policy as the mortgage holder. This is normal, as they require escrows for insurance and taxes, and thus need to be the recipient of tose bills. They failed to undo that after they figured out they couldn't write the loan on the duplex, so my insurance bill went to "Mortgage Solutions of Colorado, LLC" (aka Freedom Financial). Rather than deal with the error, however, they just trashed the bills, leaving me with expired insurance. Now repeat the same story with the Assessor's office and my property tax bill. Cascading effects: 1) I cannot get my previous insurance policy re-instated because it is past the deadline to renew it. They don't allow "new" policies with T-Loc roof shingles because you can't buy those shingles anymore, resulting in much more costly repairs. Thus, my options are to replace a perfectly good roof, or buy a different, higher-priced insurance policy. The two opportunities Freedom had to avoid this consequence were a) undo the change they made to my insurance policy when they determined it wasn't going through; and b) either forward the bills to me, or let me know there was a problem, or let the insurance company know that they were barking up the wrong tree when they billed for my insurance, rather than just blowing it all off. Imagine the consequences if something had hapenned while my insurance was lapsed?! Very uncool. 2) Since my property taxes were also undoubtedly billed to them, and equally ignored, they are now late, and I will have to deal with getting the proper payoff amount from the Assessor's office, paying late fees, and getting the records straight again with respect to billing (the last of which Freedom should have done when they backed out of the loan, which would have avoided the rest of the consequences). It is unfortunate that people/organizations don't put any thought into what will be the consequenses of their action or inaction when deciding whether to finish a job or ignore it. I will certainly consider all potential consequences next time a select a mortgage broker/lender.