Consumer complaint received 2019-07-29
Company: Caliber Home Loans, Inc.
State: MI
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
On XX/XX/XXXX we purchased an XXXX 's farm house in XXXX with my realtor XXXX XXXX using XXXX XXXX XXXX and the lender, Caliber Home Loans , Inc . The previous owner was an investor who purchased the home for approx. $ 70k and did major renovations. The interior was completely restored from the exterior studs in, including hardwood flooring, subfloors, heat ducts, new wiring throughout with main fuse box, water lines from the meter in, total kitchen renovation including appliances, 3 total renovated bathrooms, as well at a new 2000 sq. ft concrete driveway. Seller was asking {$190000.00} which we assumed was market value due to upgrades. We put in a purchase agreement. At time of the PA, we we working with a different lender, XXXX XXXX XXXX. They ordered an appraisal that had come back under asking price of {$160000.00}. The seller agent requested a review for it was $ XXXX difference. The appraiser re-reviewed and came back with approx. $ 6k more, still a major disparity. The selling agent rescinded PA. The selling agent came back to table with an offer for us to use their lender, Caliber Home Loan and felt confident it would appraise at asking price and that we would not have to pay for the second appraisal. The appraisal from Caliber Homes came in at asking price. We closed with {$1200.00} mortgage payment with an estimated monthly escrow was {$150.00}. 
Fast forward to XX/XX/XXXX. Even though we had timely paid our monthly payments, Caliber Home Loans sent us the yearly escrow statement that was showing arrears of {$3700.00}. Within 4 months of ownership, in XX/XX/XXXX, we had already been in escrow arrears over {$1500.00}. And yet, no one alert us of such. It stated that Caliber had not collected enough to cover the tax increase. The closing disclosure stated projected monthly estimated taxes was {$150.00} but should have been {$320.00}. That is more that 100 % increase. I called Caliber Home Loans and all they could tell us was that the taxes increased and they do not have any control. We went to the XXXX XXXX Treasures office for explanation. We were told that we had been 100 % homestead for the whole year, so that was not the reason for the tax increase. We reviewed the tax history print out of our home. Prior to the investors purchase of the house in XXXX, it had a state equalized value of {$29000.00} due to previous owners long ownership. Once this investor renovated the home, the state equalized value uncapped and more than doubled to {$67000.00}. The treasurer stated this happens all the time that the wrong tax year is used for mortgage processing which is deceiving and financially devastating to new home buyers. We were also told, and, its noted in the Michigan Tax payers guide that the local assessor determines the assessed value of property based on the condition of the property on XX/XX/XXXX of the previous year. We had viewed this property, to consider purchasing, between XXXX and XXXX XXXX of XXXX, so the renovations had been completed and the value of the home accounted for by the local government. At anytime after XXXX XXXX and, before our mortgage closing the accurate state equalized value of {$67000.00} was available to accurately be declared for potential purchase costs. We had made it clear to the realtor and lender at the time of this mortgage that we had reached our comfort price point with a {$1200.00} monthly mortgage payment and could not go any higher due our structured economic situation at that time. So that means someone did not do their job correctly or the lower State equalized value was used to make the monthly payment more attractive and affordable. 

After careful review of the Initial Escrow Account Disclosure statement, the closing disclosure, the tax information form, the borrower settlement statement form, and the XXXX settlement statement from our mortgage paperwork, as well as getting real estate counsel on RESPA, Truth in Lending and Good Faith Estimate and how it affects buyer and lenders, we found gross errors that we now see as fraudulent or at best negligent. These gross errors increased my monthly mortgage payment from {$1200.00} to {$1700.00}. That is unreasonable to expect a consumer, in our income bracket, to bear. That is over {$120.00} a week increase. 
It was also found the very expensive XXXX XXXX tax was omitted from the Initial Escrow Account Disclosure statement, the tax information form and the closing disclosure. 
The questions we have : How can an appraisal have a $ XXXX disparity, between lenders, only to work in the best interest of the seller? Does it not make the impression of collusion? 
How can a credible, ethical lender not know that is it not possible for a {$190000.00} home to have a {$1200.00} monthly mortgage payment? Just based on experience of processing thousands of mortgages? How a lender could expect a buyer to know that? is that not what the lender is paid for? They are the experts. 
How could any broker/ lender expect a buyer, ( who is not a licensed real estate agent & who pays the experts thousands of dollars to bring currant and accurate information to this legal document ), know the tax rate of a home of interest. Its not required to have the buyer research and bring findings to the mortgage closing to compare information. 
How can a lender/ real estate broker ( who is paid and licensed to oversee that the mortgage is executed with currant, accurate, legal information, i.e., Good Faith ) did not verify current tax information? Is that what they are legally required to do and are paid thousands of dollars for? 
How can a lender leave off vital property tax information from the mortgage contract and not be held accountable for the repercussions it takes on the buyer? 
This has put undue hardship and stress on us. We stand to lose our home or file bankruptcy. We want to keep our home but are not prepared for a dramatic increase in our mortgage payment that is not due to our errors. We are not disputing the taxes. We understand, it is what it is, but the lack of currant, accurate documentation caused us to make a financial decision based on bad information. We would have turned down this mortgage if the monthly payment was over {$1200.00}. 

Caliber Home Loans was sent a Notice of Error letter. Their response was not acceptable and did not fit the errors committed. 

How does this get rectified or made whole again? We are asking for restitution in the most urgent manner. We appreciate any and all help you can afford us.

Company response to consumer: Closed with explanation