A Finance Story

 I've been working on refinancing Base Camp and Last Hurrah joined together. I only owed about $100,000 on Base Camp as it was almost paid off but still owed around $1.4 something million on Last Hurrah. So I need roughly $1.5 million to pay off everything for a refinance. There's no debt on anything but the real estate.

I submitted to Wells Fargo first because I have twenty something accounts there with all the indoor soccer facilities, Base Camp, and myself. This was classic Wells Fargo. After about three days Wells Fargo sends me a letter says "Dear Gaylen Jorgensen, After careful consideration we have determined that you don't fit our lending criteria." Gaylen was on title with me when I bought it for Let's Play back in 2006 or 07 somewhere but not since. I called Wells up and said "after careful consideration". You don't even know who the owner is or who submitted the loan. Were you all drinking when you gave it careful consideration?

Couple other banks said I lived to far out in the boonies or the ratio of vacant land to structures was too high. The lodge qualified easily for the debt ratio though one bank did say they didn't think I could make that high of a payment though I had been making a higher payment for 40 months. Then I was getting close on one and they ran my credit check. I don't exist. I pay cash for everything but real estate. The Last Hurrah loan was a private loan so they never submitted it to a credit agency and the Base Camp loan was an accident of sorts.

I'm on an airplane from San Diego to Oklahoma City with a stop in Phoenix. A couple get on the plane and sit next to me. I'm just buying Base Camp and loading pictures of the lodge and surrounding area on my laptop. They both keep leaning over looking and I show them what I am buying and they like it. They spend a lot of time in the boonies and they are coming back from some boonie time in Arizona. We talk, they're nice people. They ask what I do and I tell them I run the largest indoor soccer company in America (big fish, small pond). I'm going to OKC to meet with a bank at 3pm about refinancing some of the facilities. The plane lands he says as he's getting out of his seat, "I'm Richard and I own a bank in OKC. Maybe we should have lunch. Here's my card. Can you meet me at my bank in an hour?" I'm not meeting with the other bank until 3pm so I've got a couple hours and I tell him "Yes."

I walk outside Will Rogers Airport and Gary and Carol on the Let's Play board of directors with me pick me up and say let's go do some numbers and then go to the loan appointment. I tell them we don't have time. We have lunch in 45 minutes on the north side of town. We drive up to Legacy Bank, meet with Richard and the loan officer at the restaurant next door to the bank and an hour later we have a deal. We cancel our other bank appointment. Later when I struggled to get a loan on Base Camp, Legacy offered to do that one too and for whatever reason never put it with the credit agencies. Since I've paid cash for everything else, I have no credit.

I have a broker searching for a loan and he hooks me up with a bank out of the south. A month or two of paperwork and they give me a loan commitment last year. I think I commented on it about that time on the blog. Then I have to get interviewed on the phone by some guy, so I do that. Then a week or two later another guy wants to interview me on the phone. The appraisal comes in and the loan will be less than 40% of value. The Phase One comes in, where they look for environmental issues and I'm clean everywhere. The cash flow is well more than the debt payment. The property is good. No issues.

Still every week they find ways to ask me the same questions in a different way though the answer is the same. It feels like they are trying to find a way to turn me down. My loan broker has called me several times saying roughly they've had this loan for six months and now they've decided not to submit it to SBA and are sending it to USDA which has a whole bunch of farm questions. Another month or two goes by and now we're well within a year of my balloon to Doug coming in. The broker says he has somebody that badly wants to do the loan. I've given the original lender $20,000 in up front costs, this lender wants $2,000. Normally I would stay with the original lender because of all the work they've done but in about eight months I'm going to have to come up with roughly $1.4 million so I better not take a chance so I submit all the paperwork to a new lender, a credit union. They are just blowing through the paperwork and after three weeks they say they'll have a commitment letter for me. The original lender says they'll have a new commitment letter from USDA. On Tuesday the original lender calls and they have the commitment letter and are ready to fund, It's ugly. Four points in closing costs plus one to the broker. Five points on $1.4 million. About $70,000 in costs, and there's the $20,000 I've already paid and it's a variable loan changing all the time and with our coming inflation it won't be long before it goes up.

On Thursday the credit union calls, same rate but fixed for five years, no closing costs or points and they'll pay the broker and well as my first three payments. It's a $100,000 difference. Both lenders are asking me to sign. I call the original lender and tell them I also submitted the loan somewhere else just recently because they'd had the loan for eight months and I got a better deal. He immediately says he can get me a fixed rate but there ain't no making up for the $100,000 difference. He's being polite but he's pissed. He's been working on the loan for eight months and it's not his fault people further up the chain have been jerking it around. I tell him I'm taking the other loan. I dreaded the phone call all night after I got the credit union commitment but it had to be done. If the credit union doesn't deliver there's no going back to the original lender.

I call the credit union and tell them we're good. Sign the commitment letter and send it to them. He says, "Just two things. We need to get the original lender to sign the appraisal over, it's customary, and you need to be a member of the credit union." I tell them the original lender is pretty pissed and I don't know if they'll sign it over or not and if not it takes awhile to get custody of it. They give me a web site to join the credit union. While they are trying to get the appraisal I go to become a member of the credit union. First of all they don't have any branches in my areas so there's a different criteria for joining. It's things like how old are my kids, am I a member of the PTA and it list about eight or ten of them, do I do this and that and my answer to everything is "No." At the end it says I failed. I don't qualify to be a member of the credit union. They hook me up with somebody at the credit union who is searching for ways to make me a member. She ask if I attend PTA meetings and do I belong to the PTA? I say no but I've always wanted to belong to the Harper Valley PTA. I hear her turning pages  and then she says "I don't see that one." Finally she says "Have you bought any vehicles in the last sixty days?" I say "Yes, I just bought two trucks." She says "Great, you qualify to belong to the Arizona Economic Council. I say "Great, after Harper Valley PTA that was my other goal to belong to the Arizona something or another. Kazam, I'm in. I'm a member. Meanwhile the original bank refused to give the appraisal over so we have to go through another couple weeks of hoops but finally get it.

Last week the new loan recorded and my balloon is paid off, I belong to a credit union, which doesn't have a branch here, and I'm a full fledged member of the Arizona something or another. I'm looking up dates for our next meeting but nothing so far.