Our Panamanian Bank Saga

I didn't want to jinx things by writing about it before, but now that we are feeling more confident about our status as financial citizens and property owners in the Republic of Panama (we will never be actual citizens there, and will always be citizens of the U.S.A.), we are ready to tell our story.

**WARNING** - This account is long and detailed and will probably bore some of you to tears. For perspective, be assured that it felt much longer to us while we were experiencing the richness of the journey.

Once we found a house that we wanted to buy (in late August 2009), we were ready to pay cash for it. If we had found a seller who had clear title, it could have been simple. Well, maybe that is exaggerated optimism - perhaps it might have been less difficult. But the seller of the house we wanted to buy had a mortgage on the house. It was all clean - he had legally declared the improvements to the property and there were no liens, claims or other obstacles to the sale. But he needed our money to pay off the mortgage so he could sign on the dotted line and give us title to the property. In the U.S.A., an escrow service would have been the solution to protect us while assuring that his bank/mortgage holder was paid.

In Panama, escrow is not the usual way to handle this situation. Instead, one usually goes through the process of having a Promissory Note/Letter issued. The Promissory Note is a contract that one party makes an unconditional promise, in writing and notarized, to pay a sum of money to the other under specific terms. In our case, it guaranteed that the seller's bank would receive the money held by the buyer's (our) bank, to pay off the mortgage.

But first, we needed a bank account in Panama - a local bank to handle this Promissory Note for us and to hold the funds for the seller's bank. Sounds simple - just walk into a bank, show them your driver's license or passport and other personal information, maybe a personal or bank reference or both, make a small deposit of dollars or Balboas, and you're in - right? Not so fast.

Panama is on the Gray List of the member countries of the Organization for Economic Cooperation and Development. The U.S.A. and some other members want full access to all of Panama's banking records so they can conduct wide-net searches for U.S. citizens or corporations that might be hiding money offshore. Panama rightly points out that their laws do allow access to banking and financial records, through the judicial system, when there is evidence that a law has been broken. So Panama is not likely to cave. But the banks in Panama do take extreme measures to Know Their Customers, a process which makes it exceedingly difficult for a non-citizen to open an account.

On September 24, 2009, we made a down payment and signed the Promissory Contract to buy the house. The next step was opening a bank account. Our lawyer warned us it would not be easy. She recommended trying at a smaller bank, possibly one that was not a Panamanian bank. The seller's agent in this process knew of a bank that was relatively new in Panama, one that was trying to get a solid foothold in the country. He had done business with this bank and had a few contacts there. So off we went to the small bank, where we filled out an application to open an account. After submitting the application, we had to return to the U.S.A. The bank needed still more documents, some of which we scanned and e-mailed, others of which required original signatures, which we sent via International Priority FedEx. And then we had to send another International Priority FedEx when additional documents were requested. I was also questioned by a bank officer regarding my contributions to candidates in the 2008 election. (They did not question Les, who made contributions in equal amounts to the same candidates.) Eventually, we were denied an account at this bank because we were not residents of Panama and we did not own property in Panama. If we could have opened the account, we could have owned property. But we could not buy the property, even though we had the money to do so, because we could not get a bank account.

Still in the U.S.A. but planning to return to Panama soon, Les had the idea to open a bank account here at a multi-national bank with branches in San Francisco and also in Panama. Just two days before our next flight to Panama, we opened the local S.F. account, and at the same time, filled out an application for the account in Panama.

A few days later, in Panama City, we managed to talk our way into the Premier division of this bank even though we did not have the $100,000 minimum investment required for Premier status. We had heard many negative reports about the complete absence of customer service at this bank, the horrendously outrageous fees charged for every feature and service, their generally bad attitude, and more. But we were desperate, so we went ahead with it.

We filled out more forms, they made copies of our passports and driver's licenses, we promised in writing not to ever argue with them or dispute any charges or claims they might make against us. The bank officer we dealt with (she is an international department head with a plush office on the 10th floor), her assistant, and the receptionist in the Premier division were wonderfully helpful and accommodating. She notarized documents, made scans and e-mailed them to the headquarters in NY, saving us many steps, much time, a lot of hassle and a little money. (I am still not sure why we were given such special treatment - so far the customer service at this bank with the bad reputation has been excellent.) She was also encouraging about the likelihood of our account application being approved. She liked the fact that we could provide a signed contract showing intent to buy the house, along with proof of the down payment, as well as a laminated photo-ID card for the residential development where we were buying the house. We went away from this bank with a good impression and hope of success in our quest.

We were in Panama for 2 weeks on this trip, and by the time we departed again for the U.S.A., we had not received confirmation that our account application had been either approved or denied. But the night we arrived back in San Francisco, we checked our e-mail, and to our utter delight, the helpful Panamanian bank officer had sent us the good news that we had an account - complete with an account number. The date was November 12, 2009.

Smooth sailing from this point, right? Not quite, and not quick. The long series of additional steps to home-ownership included wiring funds, having our Panama bank write the Promissory Note, giving our lawyer power of attorney to pick up this Note for us (another International Priority FedEx sent), the seller paying property taxes (which had increased since the Promissory Contract was signed), and the seller catching up on his mortgage payments so the Promissory Note could be finalized.

By the time we returned to Panama for a 6-week stay starting in mid-December, the seller's bank had concluded they did not like the wording of the Promissory Note. The seller took the Note back to our lawyer with specifics about the required wording. We picked it up and took it back to our bank and asked them rewrite it. Of course they had a problem with a couple of figures in the Note because so much time had elapsed since it was originally written in September and the outstanding mortgage amount had changed. Les held a long, exasperating conversation with them, explaining that the mortgage amount could only decrease, therefore the hold amount would undoubtedly exceed the amount needed - it was impossible for additional funds to be required. They agreed that this was indeed true, but the document had to be changed to their liking and it must go through the proper channels. And so it took another day to accomplish the rewrite.

But we got 'er done, and then the Note was back in the hands of the seller's bank. Just a few days before we returned to San Francisco in January 2010, the seller's bank released the mortgage as paid in full, and we had another signing ceremony at our lawyer's office. From there, the paperwork went back to the seller's bank for another notary stamp, and then to the Public Registry.

We have been monitoring activity in our Panama bank account, and the amount being held for the seller's bank has not been released - it is still sitting there in our account (although the funds are not accessible to us, of course) as of January 27, 2010.

But we received an e-mail from our lawyer on Monday, January 25th, that the deed for the house came out of the Public Registry and it is now in our name. That's four months and a day since we signed the original Promissory Contract.

Our lawyer told us that things have become much more difficult and complicated since last autumn when we first began our banking quest. She has a client who has what we do not have - permanent visa status in Panama. This client has been in Panama for twelve years, but has always rented and does not own property there. She recently attempted to open a bank account, but is unable to find a bank who will approve her application.

In any case, we are feeling a great sense of relief now that our name is on the deed of Casita Naranja. Without the bank account, we could not have made it happen.

Collared Aracari

Our friends Claudia and Bill have lived in Cerro Azul for about four years, and they feed a lot of birds in their yard. Their property is adjacent to a large swath of the Chagres National Park. They tell us it can take some time for the animals to get used to the new food sources. Our feeders have been great fun for us so far, limited though they are, but compared to Bill and Claudia's - well, it's night and day. We hope to eventually have similar success in our yard, with toucans coming to the feeders.

The Collared Aracari, Pteroglossus torquatus, is a toucan, a near-passerine bird which breeds from southern Mexico to Panama; also Ecuador, Colombia and Venezuela. Les's video (below) was shot from just inside Claudia and Bill's living room - only a few feet away from the feeders.

Another Woodpecker

We've enjoyed seeing several species of woodpeckers in the yard, but have been wondering why the Black-cheeked Woodpeckers Melanerpes pucherani had been avoiding us. One finally made an appearance while we were watching, and Les captured some video of this beautiful guy.

Commercial Warning

Think of this post as a retail advertisement and you won't be far wrong.

Our vehicle purchase in Panama was everything we hoped for and a lot more: intimidating, pleasurable, educational, frustrating, exhausting, exasperating, disappointing, entertaining, and ultimately satisfying.

Buying a used car in Panama is similar to in the U.S.A., including the price; cars here are no bargain. Oddly, many transactions are in cash. The banks only give loans for cars less than three years old, and even then, only if you have income, which we do not. So the dealers used-car lots only have recent late models. We were hoping for something closer to 4-5 years old, preferably a Toyota or Nissan pickup. While here we have noticed a large number of Mitsubishi, Isuzu and various Asian makes new to us. The Toyota Hilux is extremely popular. It's known as a serious work-horse of a truck, and it was our first choice. We have been a Toyota family for 10 years, and have never been disappointed with the brand.

Finding an automatic transmission proved difficult. Those available come at a premium. We stopped at several dealer lots to discover fine vehicles out of our price range. Then, driving through town, stopping at random lots, we found the true used cars. Some seemed promising. After witnessing the driving habits of the locals, it was a bit surprising how readily the lot owners allowed a test drive - nobody ever asked for a driver's license. But off we went with, usually, clouds of white, blue, gray or pitch-black diesel exhaust and apprehension spewing as we learned they come with only a 90 day warranty. The dealers have 6-month warranties on engine and drive train.

We were stumped. How could we find an automatic 2000-2005 Toyota Hilux with a good warranty within our budget? We stopped at the Auto Market in December and a saleswoman named Amoy Reyes followed through (imagine that - in the U.S.A. or in Panama!) on Cindy's inquiry by having their English-speaking General Manager, Ricardo de la Guardia call us. He said there were 2 automatics on the lot. When I voiced our price range, there was a bit of a pause, but he suggested we come down to take a look.

Luis Salazar, his picture is at the right, was with us during our test drives of both the Nissan Frontier and the Toyota Hilux. After a fast squirt of fuel at a station we were off. The Toyota felt a bit more solid on the highway. After some back and forth, Ricardo came down and we up, he agreed that having a mechanic take a look was a good idea. Luis went with us to the local Auto Centro and for $26 they said 4 things needed attention, which Ricardo took care of. So we had a deal.

We love our Hilux - it seems to be in excellent condition. It looks quite new, especially for a 2005, and there is no smoke of any color spewing out the back of it. It already has a nice dent in the back bumper, so we won't stress too much over the next ding it receives. During some detailing yesterday, we discovered some peanuts under the back seat (it has a double cab), so maybe it was a family vehicle rather than a work-horse construction vehicle. We hope so.

We Love Our Gardener

Although very few of the property owners in Los Altos de Cerro Azul are full-time residents, most with a house on their lot have a gardener, and even some with no house have a gardener. (It could be argued that a gardener is needed more if the owner is not living up here.) When a property is sold, it is customary for the gardener to continue on with the new owners.

Casita Naranja did not have a real gardener, although there was a guy who came over once in a while to mow the yard. He has mowed only once since late September when we began spending time here. That was in early November. We have not heard from him since, although we thought we had an agreement with him to mow & rake once a month. Even so, the yard shows signs of many months or years of general neglect with only the occasional few hours of attention.

During our August search for property we met Arturo, a gardener for several properties up here, some of which were for sale. He led us inside 3 of them to take a tour. I got a really good vibe from Arturo (I'm all about the vibe), and the properties he took care of all looked great. His wife, Marizin, is a housekeeper for some of them, and she keeps the interiors absolutely spotless. They were both so responsible, reliable and respectful of the properties under their care - Les and I were impressed. (The respect thing - maybe that's not quite the right word - is somewhat uncommon here and, come to think of it, not all that common elsewhere. Often a worker, our former "gardener" included, leaves a trail of dirt, paint, leaves, grass clippings, and general disarray whenever he goes into the house, even appropriating as rags our towels intended for dishes or hands.) Arturo showed great care when he went in the houses - he left no trails.

So when the former "gardener" continued to be a no-show, we tracked down Arturo, and he now counts us on his list of clients. We are really pleased and excited to enlist his services.

Arturo does not speak English, and I do not speak Spanish, so we are on equal footing. But we have managed to communicate in his speedy style and my halting manner, and during his three visits so far, he has made great strides with the yard. He has good ideas regarding the choice and placement of plants, and has already figured out the things we like. First he brought and planted 3 more small banana trees and some flowering plants that he calls "Novio Chino" - I'm finding the translation is "Chinese Boyfriend" ?? Anyway, I think they are Impatiens; some have have pink flowers and others have orange flowers. Next time, he brought some Hortensia (he says they will have many flowers) and some "Bandera", as well as several tomato plants. We feel like we are on the right course with Arturo.

Dizzy Dining

Les packed a suet feeder in his bag on the last flight to Panama. It turned out to be one of the most valued items we brought. We plan to buy a few more when we get back to California and bring them down.

At first we put the bananas out on an old termite-infested table. It worked pretty well for a while. Then the squirrels discovered the feast - they take the whole banana away, consume it, return for more, and repeat. The Clay-colored Robins are also a problem. I don't mind that they have some of the bananas, but when they land it creates chaos, and if all the other birds don't disperse after the noisy landing, the robins clack their bills aggressively and lunge at any remaining tanagers or euphonias or honeycreepers. This bad behavior is not welcome in our yard. There is only so much time we can devote to the policing of robins and squirrels, so we have resorted to using the suet feeder to the exclusion of all other food-delivery methods. We were concerned that the larger tanagers (Hepatic, Palm, Blue-gray) would not be able to feed from it, but we need not have worried. While the honeycreepers, euphonias and Plain-colored Tanagers handle it best, the 3 larger tanagers manage quite well and get their share of the delicious bananas. It's great fun watching the show, and I asked Les to capture some video of it. The maximum Palm Tanager load on the suet feeder to date is 8, although the camera was not rolling when it occurred.

Houses of Los Altos de Cerro Azul

The architecture in Los Altos de Cerro Azul can be described as "varied". A cement block structure sitting idle will cozy up to a McMansion. Many of the homes have steep roofs more typical of a Swiss Chalet. They wouldn't have seen any snow, of course, but the rain does fall off in torrents during the rainy season. Here are some snapshots I've taken while driving through the development on our early exploratory trips and now, running errands.

This one reminds me of a fast-food restaurant. Can you guess which one?

A rental which we might have followed up on if Casita Naranja hadn't come through.

"Habitat House" asked $100k. Even thought the trees were excellent, we kept looking

A small room for sale.

The most vibrant color in the development.

The color helps mask algae that grows up here.

We were told this one was for sale, but didn't get any more information. There was a glass enclosed bohio next to a steep backyard.

We came very close to making on offer on "Casa Roca". Needed modifications began looming after our first excitement wore off. It is currently undergoing massive remodeling.

"Casita Naranja"

Jimmy - the Most Popular Guy in the Neighborhood

We are still renting a car, or more accurately, cars. Tax consequences prevented us from buying one here in 2009, and now we are moving funds so that we can make the purchase - soon, we hope.

So rental cars have been part of our Panama lives thus far. Searching online, it looks like a fabulous bargain - economy, compact or intermediate-

sized vehicles for only $5.95 to $8.95 per day. We decline the comprehensive insurance since our Visa card covers that. But upon arriving at the rental car counter at PTY (Tocumen International Airport), one is faced with the mandatory liability insurance. All the major rental vehicle companies familiar to a U.S. customer are here, and they all charge for this liability insurance, although the charges range from $12/day to $18/day, depending on the company. It adds up fast, especially when one is looking at a 2-weeks rental or a 6-weeks rental. I had booked for our first week with one company, then with another company due to holiday prices and availability.

During the first week we had a flat tire while driving home. Les changed the tire, then we drove to the airport and switched vehicles the next day. A few days later, when we turned that vehicle in, we were informed that we had to pay for the tire because it was "broken" - Les explained that we did not go on gravel roads or cross country or get into an accident, that it was simply normal wear and tear. They would not accept this reasoning - the tire was broken (meaning it could not be repaired), so we owed them for it. OK - our coverage through the Visa card will take care of it, but we are now soured on this first company.

The second company had raised their liability insurance rates to $18/day, so after renting a vehicle from them, we immediately began searching for another, less expensive company. There were none at the airport, however we did find one at a nearby hotel. But within a couple of days of driving that vehicle (our 4th one of this trip), Les noticed that the steering felt flakey, and when he stopped to assess the situation, he noticed that some of the tires were soft and had very little tread. After a stop at a gas station to check the pressure and add air, we drove to the hotel and explained that since the tires were nearly bald and not holding air, we felt unsafe driving the car, so they let us exchange it for another. It steered much better and the tires looked a little better. Within a couple days, we had another flat tire. This one went flat overnight while we slept. Les again changed the tire, and we went to the hotel rental car desk and asked to exchange the vehicle. The only one they had was an automatic, for which they wanted to charge us an additional $3/day. We said no, so they said they would fix the flat within 30 minutes if we waited. While we waited, we had coffee at the restaurant, and they brought the vehicle back with a repaired tire in about 30 minutes. A couple days later, Les noticed that another one of the tires had a slow leak.

This time, instead of driving to the hotel and trying to deal with the rental car people, we took things into our own hands. We went to Taller Yimmy (Workshop/Garage Yimmy).

Along a 1 or 2-mile strip of the Panamerican Highway at the foot of the road to Cerro Azul are tire shops - a few only sell tires, most sell and repair tires - there must be 15 or more of these shops. Most are very small, with only one or two vehicle bays, and most seem to do a thriving business. Several of them are named "Taller Yimmy", "Llantas Jimmy" or "Llantas Yimmy" - we don't know if they are related, a chain, or what. We chose one with the former name, and asked if they could repair the slow leak for us and how much. Unlike most of the tire shops, this one had a desk and a receptionist. Her name is Esperanza, and the tire guy is named Feliciano - they were both very friendly and welcoming (not something you can count on here), and Feliciano is a master with the tires. He had it off the wheel, repaired and back on the wheel within about 10 minutes. The cost was $1.75. Two days later, while refueling, the gas station attendant found another low tire, so back we went to see Esperanza and Feliciano. This time, Moises was there, helping Feliciano. He enjoyed standing back in the corner and plinking a few shots with the air wrench now and then. We think Moises is Esperanza's son.

We hope we will not have to visit Feliciano again very soon, but it's nice to know where to get help with our llantas the next time we need it. And we are sure we will. Some of the roads in Panama are not great. They have potholes, missing manhole covers, missing storm grates, poor patch jobs, unmarked speed bumps, regular bumps, lumps, slumps, uneven pavement, unfinished driveway ramps, and very few signs to warn drivers of any of the above.