Consumer complaint received 2022-10-03
Company: Pacific Residential Mortgage
State: WA
Product: Mortgage
Sub-product: FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
We originally applied for a mortgage loan with XXXX XXXX XXXX XXXX XX/XX/XXXX. XXXX. At that time we were told that our file needed to go through underwriting in order to get the most accurate number for our pre-approval amount. We told the mortgage officer at the time our financial situation, that included a prior bankruptcy filing, its discharge date and our need for down payment assistance. We were assured to continue with our application and subsequently received a pre-approval letter for {$450000.00} which was later revised to {$460000.00} a few days later ( XX/XX/XXXX ) We immediately went shopping for a home and went under contract sending the details to the mortgage officer and our agent. On XX/XX/XXXX we were referred by the mortgage officer of XXXX XXXX XXXX ( XXXX XXXX to Pacific Residential Mortgage ( PacRes ) for purposes of underwriting only the DPA portion of the loan. We were assured multiple times that our earnest money was protected throughout the process and that there was nothing to worry about. We proceeded with depositing {$4500.00} in XXXX XXXX with XXXX title on XX/XX/XXXX. The appraisal, home inspection and sewer scope were subsequently ordered. 

We continued correspondence with our representative at XXXX for the next several weeks, who routinely reached out to PacRes for updates to our file, while continually assuring us that our earnest money was protected and that our loan was in progress. 
During this time, multiple instances of negligence, malpractice and fraud took place. Pacific Residential was aware of consumers need for DPA in addition to a manual underwrite, however did not process the file in an appropriate amount of time to protect buyers earnest money. This negligent business practice, further caused consumer to invest in a transaction that could not feasibly come to light due to XXXX regulations set forth by FHA lending. XXXX XXXX XXXX defrauded consumer by providing a pre-approval letter which could not have come to close due to the previously mentioned facts. 

Furthermore, a relationship between XXXX XXXX XXXX and Pacific Residential Mortgage was implied, HOWEVER, in actuality employees from XXXX were in process of terminating their positions and transitioning to PacRes hoping to take clients along the way. 


On XX/XX/XXXX - We applied for a mortgage with XXXX XXXX XXXX XX/XX/XXXX - Pre-Approval letter sent via XXXX XX/XX/XXXX - Consumer goes under contract XX/XX/XXXX - Client Handoff from XXXX to Pacific Residential Mortgage for XXXX assistance. Application submitted to PacRes. Email sent to PacRes stating earnest money was to be sent. 

XX/XX/XXXX - form executing agents be kept up to date. 

XX/XX/XXXX - Underwriting orders report update through XXXX. Multiple emails and vms have been left to follow up on loan status. 

XX/XX/XXXX- Near daily correspondence with XXXX asking for updates from PacRes. 

XX/XX/XXXX - Loan denial, 3 days before closing. Had to call PacRes at least 5 times to get the denial letter to immediately notify seller. 

XX/XX/XXXX - Begin process of recouping XXXX from both PacRes & XXXX. 

XX/XX/XXXX, XXXX PacRes states two arguments ( 1 ) They are not the lender, no promises were made on behalf of PacRes ( 2 ) They are the lender, they are the only lender ; there were no financing changes and buyer is not in violation of purchase contract/is entitled to earnest money XX/XX/XXXX - Earnest Money forfeited due to contract violations. Demand letter sent seeking reimbursement.

Company public response: Company believes complaint caused principally by actions of third party outside the control or direction of the company
Company response to consumer: Closed with explanation