Consumer complaint received 2023-08-15
Company: HILLTOP HOLDINGS, INC
State: OR
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
Residential Loan Misrepresentation, for Commercial Business Use : ( Fraud for Housing/Profit ) PrimeLendings loan # XXXX XXXX XXXX XXXX XXXX XXXX OR XXXX, was taken out XX/XX/XXXX as a Residential Loan with a 1-4 Family Rider. This property is a Commercial Business. 
The loan was misrepresented ( fraud ) as a single-family residential property. 
The 1-4 Rider was misrepresented ( fraud ) as a multi-family property. 

The property is a Commercial Business, XXXX XXXX XXXX XXXX XXXX. This for-profit business will be operated by XXXX XXXX who is the son of XXXX XXXX and XXXX XXXX . The business started XX/XX/XXXX. The Commercial Business is a medical facility operating 24/7 that will have up to XXXX  patients with payment either through insurance or cash. There will be 3-5 employees on staff to operate the business.

Numerous permits have been taken out, approved, and completed to turn the single-family residence into commercial use.

These facts acknowledge that the mortgage was misrepresented as a residential loan vs. commercial loan. 

The property is a single-family house and is zoned as a single-family property. It is NOT a multi-unit property. 
( 1-4 Family Rider. A 1-4 Family Rider is typically required for multifamily investment properties with up to four units or two-to-four-unit properties that are owner-occupied. This type of rider permits the lender to collect rent from the property if you default on the loan. Any rent the lender collects goes to pay down the outstanding loan balance until the default is cured. If you pay your mortgage on time and do not default on your loan, a 1-4 Family Rider should never be an issue. If you default on the loan, the rider provides protection for the lender because it can use rental income from the property to pay the mortgage. ) The 1-4

Family Rider was misrepresented ( fraud ) as a multi-unit property. G. ASSIGNMENT OF RENTS ; APPOINTMENT OF RECEIVER ; LENDER IN POSSESSION. The Commercial Business collects insurance or cash payments for medical purposes. The lender PrimeLending would not being able to collect on any monies without being licensed by the State or Oregon as a medical provider. Since the ability to collect by the lender is not obtainable the 1-4 Family Rider is null and void.

Due to these facts, Section 6, Occupancy and Section 8, Borrowers Loan Application have been violated. Since Section B above has been misrepresented using deceptive tactics and manipulation to try and eliminate the owner occupancy requirement. However, this Rider is null and void as an enforceable document by the lender in the 1-4 Family Rider. 



Occupancy is still required under the original loan document! 

The owners of the property ; XXXX XXXX XXXX XXXX  OR XXXX are XXXX XXXX and XXXX XXXX Trustees. Neither XXXX or XXXX have occupied this property since they purchased the property. Their residence continues to be their home in XXXX XXXX, CA. 

XXXX XXXX with the Division of Financial Regulation, Compliance Specialist for the State of Oregon was contacted. 
The recommendation from the Compliance Division was to contact PrimeLending directly to bring any misrepresentation to their attention. 
XXXX XXXX, PrimeLendings General Counsel was contacted notifying them of the fact that the loan was misrepresented as a residential loan vs. a commercial loan and that the 1-4 Rider was misrepresented and would not be enforceable. Commercial loan costs and loan terms are vastly different than residential loans due to the risks involved.

Third Party Reporting It was recommended to submit to XXXX per XXXX XXXX response : submitted XXXX, case closed XX/XX/XXXX, no justification for the closing was provided. 
Using this document and the evidence provided I am requesting an investigation into the loan fraud for PrimeLendings loan # XXXX, XXXX XXXX XXXX, XXXX, XXXX XXXX.

Company response to consumer: Closed with explanation