Consumer complaint received 2017-05-06
Company: U.S. BANCORP
State: NV
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process

Complaint:
We would like to lodge a complaint against the holder of our home equity loan  - U.S. Ba nk. We believe they have engaged in deceptive lending practices as well as dishonest and unfair loan servicing arrangements.     In  XXXX  of   XXXX  , my husband and I closed on a home equity loan through  U.S. B ank. We were made to understand at the time that this was a traditional mortgage/home equity loan with a standard amortization repayment schedule. We did understand that the terms of the loan required us to open  a US Bank checking account and arrange to have our monthly payment withdrawn automatically fro m that account.     Approximately  six months i nto the repayment period, we started noticing that the amount of interest applied towards the loan payment was varying from month-to-month. In any other mortgage we have ever held, with each subsequent payment the amount applied towards interest decreased and the amount applied towards the principal balance increased. We were a little bit stumped as to why this would be occurring.     Subsequently, we approached the local  US Bank branch where we initially secured the loan and asked to speak to a manager . We asked for an amortization schedule so that we could fully understand why the interest payment amounts were not consistent from payment to payment. Tha t manager told us that I would have to contact U.S. Ba nk mortgage loan servicing because she could not provide us with any answers.     I then contacted  US Ban k home mortgage via emai l. [  PLEASE NOTE, A COPY OF ALL CORRESPONDENCE IS ATTACHED TO THIS SUBMISSION. ] Our first contact with loan servicing was to request an amortization schedule. The reply we received was that they could not provide a copy of the requested amortization schedule.     I then wrote back, wondering why they could not provide me with an amortization schedule on a mortgage!  XXXX   XXXX   XXXX , with loan servicing, replied that it was because I had a " daily simple interest loan '' type mortgage. With a " daily simple interest loan '' type mortgage, interest amounts would vary monthly depending on how much interest had " accrued '' based on the date the payment was applied. For example, if my loan payment date was the  XXXX  of the month, and if the  XXXX  fell on a Saturday, interest would accrue over the weekend until the  XXXX  when the funds were finally applied to the loan payments. I specifically asked if this was made clear in my loan documents since when I reviewed them was unable to find any reference to obtaining a " daily simple interest '' loan.  XXXX   XXXX  replied in the affirmative that indeed my loan documents did NOT specify " simple interest '', but rather simply stated " accrued interest. '' This was the first of the misleading and deceptive practices engaged  by U.S.  Bank when we secured this loan. It should have been made very clear to us that this was anything other than a standard amortized loan.  XXXX   XXXX  then implied that by reading the note should we know that accrued interest really means simple interest loan, and that because it didnt state monthly interest we should have then been aware of the nature of the terms. My husband and I wholeheartedly disagree for the average consumer who is not fluent in legalese and/or manipulative financial language it was far from apparent, and deliberately meant to deceive.     I then wrote back asking if I could move my payment date so that I could make sure my loan payment was submitted each month prior to the due date so that I could avoid any excess " accrued interest ''.  XXXX   XXXX  stated that they could schedule my ACH withdrawal ON the due date or  1 to 5 days AFTER the due date ( thus incurring even more " accrued interest '' ) but that they were  unable to move it to a date prior to the scheduled due date. I find it suspicious that a simple keystroke cant change my ACH withdrawal to the date of my choosing as long as it is within the on time payment window. I then asked if I could cancel my ACH withdrawal and manually schedule payments and she confirmed that by doing so I would violate the terms of my loan.     In summary , U.S. Bank  deceived my husband and me when receiving this loan as to the specific type of mortgage we were obtaining. Indeed, it seems the note was deliberately written to be misleading and/or deceptive to any person/consumer who does not have a background in the legal or financial industries . US Bank is also forcing us to pay extra accrued interest on our loan month after month ( e ven with an on time ACH withdrawal ) due to when they have chosen to withdraw the funds from our account and apply it to the loan. They are also refusing to allow us to escape these excess interest charges by failing to allow a loan payment prior to the due date . US Bank also acknowledges that submitting the loan payment by any other method than through ACH with a US Bank Checking a ccount will violate the terms of our loan. Over the term of this loan, they are effectively adding hundreds or thousands of dollars in interest costs because of their refusal to allow us to submit our loan payments on the date of our choosing. We find this no less than extortion.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation