Product: Mortgage

Property Address :  XXXX   XXXX   XXXX   XXXX , Maryland  XXXX  Settlement Date :  XXXX   XXXX   XXXX  VA Loan Number :  XXXX  Lenders Loan Number :  XXXX  Lender 's VA Identification Number :  XXXX  Summary : Deceptive business practices ; predatory business practices ; bad faith ; failure to remedy building issues ; violation of contractual terms.     K.Hovnanian acted in bad faith and demonstrated deceptive business practices when selling us our new home. The seller made patently false statements in relation to the loan process, mortgage interest rate, overall value of the home, expected utilities and willingness to remedy poor construction.   Throughout the negotiation process we were assured th  at K. Hovnanian would provide a fair and comparable interest rate as compared to other pre-approved rates and market rates. Hovnanian failed to provide a comparable, competitive rate.
K. Hovnanian   made representations throughout the contract negotiation that later turned out to be patently false. Some of these include : the home being energy efficient, the home being of excellent construction, the lot being graded and designed for irrigation. All of these   turned out to be patently false.
K. Hovnanian has failed to fix issues with the home. These issues were identified at closing. Builder agreed to fix all outstanding issues. Nine   months after closing issues remain outstanding.     Background : From  XXXX   XXXX   XXXX , I was stationed overseas in  XXXX ,  XXXX . In the spring of  XXXX  I received follow- on military orders to the  XXXX   XXXX  area. While in the United States for house hunting leave I identified a made to order home which was up for quick sale as the original purchaser had backed out of their contract. This quick sale home was located in a new neighborhood of made-to-order homes being constructed by  K. Hovnanian. I decided, based on various representations made by the builders sales representatives that this home would be a good fit for me and my family : some of these representations included : 1 )  construction being complete in  XXXX   XXXX ,  2 )  the loan interest rate being offered by  K. Hovnanian being competitive with market rates, 3 ) the construction of the home being high quality, 4 ) the   home being high efficiency.     Of note, because this was a quick sale home, we were not eligible to make any changes to the design or layout of the home. We were to buy the house as is.     We were originally supposed to settle on  XXXX   XXXX , however, that was delayed until  XXXX   XXXX  for reasons never disclosed to me. This delay came at considerable inconvenience and expense to me and my family.     I entered the contract with this home while maintaining mortgage pre-approval from  XXXX  and  XXXX   XXXX  with rates of 3.5 %, 3.25 %, and 3.375 %. Ultimately, I was able to obtain an interest rate for a VA  Fixed Rate  loan from  XXXX   XXXX  for 3.25 %. While negotiating with the seller I was consistently told tha t K. Hovnanian  would offer a competitive interest rate. This was an important element of negotiations a s K. Hovnanian  would offer the advertised sales price only if their loan company were utilized to secure the mortgage.     Entering into negotiations with the seller, I agreed to purchase the home for a purchase price of {$690000.00 } ( the s ales price advertised to the publicbut only applied if those customers utilized  K. Hovnanian  for as their mortgage lender ). I made the builder and lender aware of the market rates for a VA  Fixed Rate Loan and was assured that K. Hovnanian  's rates would be competitive. Once we moved into the loan application process, the seller maintained constant contact with the lender, as they are both owned by they same parent company.  K.Hovnanian Lending se rvices offered a rate of 4.125 % which was nowhere near competitive with VA fixed rate loan interest rates. I informe d K. Hovnanian  that I would be using  XXXX   XXXX , so the lender informed the builder and the builder raised the purchase price of the home to {$720000.00}. At this point, the lender and builder continuously collaborated to try to force me to use K.Hovnanian as the lender. The sales team for the builder was in constant contact with the loan  officer  in Florida and all parties were, from my perspective, trying to present numbers in various forms so as to give the appearance of a much better deal, when in fact it was not. They even went as far as to contact my wife without my knowledge and try to convince her to make the deal wit h K. Hovnanian u nilaterally. In the end, the purchase price of the home was {$700000.00}  (  not  XXXX  which was what was originally agreed upon if I use K.Hovnanian 's lending services.  ).  Additionally, I obtained a 3.25 % interest rate, but I had to pay {$10000.00} in points to buy down the rate and I still have an APR of 3.481 %. Because of the lender 's overly familiar relationship with the builder, I was in no position to bargain or protect myself from what I thought were predatory practices. The builder and lender were aware of the urgency of my move and the nature of my overseas PCS move. I believe the builder was dishonest in all aspects of the negotiation process.     The discounted purchase price of  XXXX  was offered along with  XXXX  incentives. These incentives consisted of certain upgrades the purchaser could elect to incorporate into the home. However, I was not in the same position as other purchasers in this neighborhood as I was purchasing a quick sale home and not a made-to-order home. Since this was not a made-to-order home the price to purchase should have been the price advertised to the public.     In addition to making false representations regarding the competitiveness of their loan interest rate,   K. Hovnanian also entered into other deceptive practices.
They consistently told us that the construction of K. Hovnanian homes was superior to other builders. Yet at closing we identified several glaring defects including mis-installed cabinets ( literally installed sideways instead of right side up ),   poorly installed tile work in the master bath ( with holes throughout the grout which would allow water to seep in and destroy the underlying walls and flooring ), and other glaring construction issues  . K. Hovnanian admitted to their culpability and agreed to fix the issues. We submitted a list to the company at closing. The majority of the items on the list remain outstanding.
Throughout the sales process we were told that K. Hovnanian   utilized the best technology to make the homes energy efficient and that this would cut down on energy costs and save us money in the long run. We were quoted costs as low as  XXXX  dollars a month. After 9 months occupying this house we have determined that the energy costs associated with this home is simply comparable with other similar sized homes. We complained to   K. Hovnanian and indicated that we believed making these types of representations to the public constituted deceptive practices.
K. Hovnanian   represented that our lot would be graded to remove water from the property. They indicated that special care and attention would be paid to every home in the neighborhood to ensure that water flowed away from the homes and into common drainage ditches that serviced the neighborhood. Our yard is improperly graded. The yard frequently floods and a large pond forms at the corner of our home. This results in about  6-7 in ches of standing water after every storm.   Our neighbors all have had similar issues with their homes. This is indicative of larger issues with this builder. They systematically deceive purchasers into buying a new home through overpromising and under delivering. We relied on the representations made by K.    Hovnanian i n entering into this purchase and it has acted to our detriment.     Also, I am currently learning that I could have purchased a home to order in the same community, as this is a new development. It was presented to me that if I wanted to move into a home in  XXXX , I had to purchase the  XXXX  home. Immediately after closing, I learned that  four  other homes were being completed and transferred to the owner in  XXXX  and  XXXX  of  XXXX . The point of this last issue is that these homes were built to order, but I had no choice in any of the options for which I paid. Therefore, the purchase price which I paid featured many items that I did not elect to enhance the property. It was very vague and misleading as to how these " incentives '' were applied because none of the things that I wanted were " feasible '' to add as it was portrayed to me. With this in mind , one  of the " incentives '' that were added to this house was a covered deck, which I understood to be in the plans for the house when I submitted the non-refundable {$35000.00} deposit, however, this feature was removed from the plans.     The original {$690000.00} price was something that was presented as special deal for military service members. Now that more homes are in the neighborhood, I 've learned that more than several of the few houses in the neighborhood paid far less, specifically a model that featured the same " fixed '' list price. In the end, the bottomline is that I submitted a {$35000.00} deposit for a home that I thought I was paying {$690000.00} when I was forced to raise the purchase price to obtain a mortgage that would have cost me much less had I not been forced to use  K. Hovnanian ' s in house lender.