Consumer complaint received 2017-07-17
Company: The Star Financial
State: CA
Product: Mortgage
Sub-product: FHA mortgage
Issue: Closing on a mortgage

Complaint:
Financial Hardship & Unscrupulous Lending Practices : New monthly mortgage payment MORE than Old monthly mortgage payment.
New monthly mortgage payment includes MI {$290.00}.
MI paid in Closing Escrow  XX/XX/XXXX  {$7700.00}.
We were promised a lower monthly mortgage payment by Loan Officer of {$300.00}.
Lender justified increase in monthly loan payment by lowering interest rate and not charging origination fees on their loan to us. Explained on day of signing loan docs.
Disclosures relating to " change in loan program '' from Conventional to FHA never received. We would never have agreed to these FHA Terms.
Appraisal received after loan closed. We were not able to dispute appraisal before loan closed.
Not advised of a 3 day right to rescission clause.
I have included ( scanned ) all documents pertaining to this claim.
This complaint is about a refinance through Star Financial Bank (    XXXX   XXXX   NMLSR  #  XXXX ,   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX     XXXX   XXXX  , CA  XXXX . ) The broker was   XXXX   XXXX   ( NMLSR #  XXXX  ).
Before this refinance we had an adjustable HAMP note. We wanted to refinance into a Conventional fixed 30 yr loan with NO PMI ( we have not paid PMI for 20 years.
Purchased home in  XX/XX/XXXX .
My husband recently retired and now receives a reduced fixed monthly pension and I receive {$730.00}. monthly from SSA  XXXX .
On  XX/XX/XXXX  the terms that   XXXX   XXXX    offered us was a 4 % fixed interest 30 yr Conventional loan with no PMI. So we moved forward.
At no time between then and the final signing were we informed of any possible or potential changes to these terms. Nor we were ever given the appraisal ( which, it turns out, was done by   XXXX   XXXX   company rather than an independent appraiser. ) The final signing was on  XX/XX/XXXX .   XXXX   XXXX   did not attend and sen  XXXX   XXXX   XXXX   XXXX   a loan officer with Star Financial (   XXXX   XXXX   XXXX   XXXX   XXXX   XXXX  .,   XXXX   XXXX   , CA  XXXX    Lic #  XXXX  ) and a notary public. We were advised for the first time that the interest rate would be changed to 3.25 % & that our home 's appraised value was too low for a Conventional Loan so instead we had to go with an FHA Loan that included a monthly PMI payment of {$290.00}. This PMI will remain on our loan for 11 yrs. He never explained that the first MI payment would start  XX/XX/XXXX and that there was an additional {$7700.00}. to be paid out of the closing escrow. Increasing our loan balance.
Our first new mortgage payment was XX/XX/XXXX so consequently there was not enough money in our impound account to cover the added PMI to be paid from  XX/XX/XXXX .
This caused an additional financial hardship.
  XXXX   XXXX   explained it in a way that made us feel like we were getting a lower interest rate that would even out the high PMI and that was confusing to us. We never had an FHA loan and didnt have time to understand what it meant until days after signing to absorb the details. He said, we could just refi in 6 months when our home would appraise for more and then we would qualify for an Conventional Loan.
I am a Senior,   XXXX    individual and under doctor 's care and I felt mentally/emotionally victimized by this loan officer to sign loan documents without having time to understand the changes. My retired husband also felt pressured to do the same, in fear of losing our opportunity to refinance.   XXXX   XXXX   even had to come and take pictures of running water and working appliance in our home after we signed the loan papers so they could fulfill FHA Funding.He told us.
If we had been given the appraisal before being pressured to sign we would have had a chance to understand that we simply couldnt qualify for the loan terms we were looking for and not have gone through with this Predatory Loan.
We have recently contacted   XXXX   XXXX   to proceed with a re finance but are unable to qualify because our income to debt ratio is too high.
Please Help!

Company response to consumer: Closed with explanation