I recently refinanced my house for a lower interest rate. The final days leading to the closing give insight to the business continuity and DR improvements companies can strive to achieve.
My refinance was with the mortgage holder. This US bank, one of the big four and the recent benefactor of bailout funds, was more than happy to accept my refinance application.
As a bill-paying-never-in-arrears-with-my-mortgage customer, the approval process was lengthy. (“If only you’d missed some payments we could make this happen quickly” Argh.) Once finally approved, I wanted to move quickly to the closing to immediately begin reaping the benefits of the lower rate.
The closing was scheduled with great expectation for 8AM on a Wednesday.
This is when the company flaws became pronounced.
At 2:00PM the day before the closing the bank called, “We’re sorry, we don’t have the final closing numbers because our computers are down.”
“So a big name bank with billings of dollars (and bonuses to match) can’t access my closing account information. OK, interesting… banks should have generally available systems, outages are really unacceptable. Oh well, I’m sure it is temporary,” I thought.
Wrong…the next day, around 9:00AM, we rescheduled to 2PM.
And then we rescheduled to 4:30PM.
At this point, I asked for a manager. The manager sheepishly acknowledged, “We’ve now got the final numbers, but the Title Company we use has staff ‘working from home’ due to heavy snow in Maryland. They not able to work effectively from home.”
So this bank subcontracts certain key elements of the closing process to other firms…and obviously the business continuity plans are ineffective. When was the last time these plans were exercised? If Maryland is getting hammered with snow, why not redirect the work to the west coast? Why isn’t the bank asking these questions of the firm they use?
Another day goes by, and I’m still paying the old, higher rate on the mortgage. Somehow, this doesn’t seem right. And what reasonable recourse do I have? I am paying the bank for a service, and they hired the other companies. The DR and continuity plans are clearly inadequate. How do I get reimbursed for the extra day at the old interest rate? How do we address the poor service issue?
As a customer, there’s little we can do beyond being vocal, especially at the end of a long road. The companies providing the weak service get paid no matter what, and are not held accountable.
Ironically, if a gas pump at a local gas station doesn’t work, you either use a different pump or go to a different station. There is a direct impact on the sales and profitability of the station. It’s a simple model.
How does a bank get held accountable by their customers? Go to a different bank…easily said, and harder to do at the end of a process. I don’t envy Department of the Treasury Secretary Timothy F. Geithner trying to sort the bank accountability issue!
Did I eventually close? Yes. I did discover this bank has an active social media monitoring effort. To their credit, they picked up on some tweets in the waning moments of the process and tried assisting.
The closing attorney and I did have a bit of a disagreement; I insisted the computer generated forms use my name and not someone else. We’ll talk data quality in another post!