Consumer complaint received 2023-09-06
Company: LD Holdings Group, LLC
State: MN
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage
Sub-issue: Trying to communicate with the company to fix an issue with the loan closing

Complaint:
This complaint is to request assistance with two major issues caused by negligence or fraud on the part of Loan Depot. 

First, they approved me for a loan on XX/XX/XXXX, when I had not started a job and had no history of steady employment. I sent an offer letter for my new job starting XX/XX/XXXX. At the time Loan Depot approved me, I had less then three months of employment total between 4 or 5 companies over the preceding 6 months. When I did get started at the job, I texted my loan officer on XX/XX/XXXX that the job was over an hour away from the house I was purchasing. I let Loan Depot know my employment was not stable as I was constantly under threat of termination. I let Loan Depot know my first pay check was a week late and that the company was struggling to pay it's employees. I even mentioned I would likely be fired at the closing table when the closing meeting for the house took several hours longer than expected. I believe they used my wife 's income to artificial inflate my income to approve me, as she was working but has a XXXX credit score. When the house flooded severely with sewage, see below, I was not in a financial position to pay for all the renovations and discovered value of the house was substantially lower than the loan was approved for so I couldn't just sell the property. I am stuck because of the fraud or negligence that was perpetrated by Loan Depot in determining my ability to repay under Regulation Z. ( I've been learning quite a bit about banking laws in the last few weeks so forgive me if this reference is the incorrect statute. ) Other mortgage companies I've approached to try and buy another home have told my there is no way they would have approved me for the first loan, let alone a second even if I did sell the first home. 

The second issue is that the value Loan Depot approved the loan for is at least {$100000.00} over the actual value of the home at the time of sale. Loan Depot hired an appraiser to determine the value of the property on XX/XX/XXXX. My wife and I were warned by our realtor that the property would likely not appraise at the value of the offer, in which case we would have walked away from the home. Instead, to everyone 's surprise, the appraiser set the value over our offer. Unknown to my wife and I, the property had been attempted to be sold in XXXX with one less bathroom. That sale attempted XXXX also included disclosures that the house had been renovated by the previous home owner including walls and plumbing. However no permits were acquired during the entire time the sellers owned the home. This information was available to Loan Depot through XXXX and the appraiser. These red flags were ignored by the appraiser and Loan Depot and none of this was included in the disclosures provided to me. I closed on the house on XX/XX/XXXX, and two days later on XX/XX/XXXX, the plumbing started flooding into the basement. During the mitigation process, I learned that the previous home owner had redone all the plumbing and electric in the property without permits or knowledge and that it regularly flooded. The plumbing was done so poorly the house was filling with sewer fumes and I had to move out on XX/XX/XXXX. I can provide the letter confirming this from a plumber. The electric was so poorly done, I've been advised not to turn on the electric or risk burning down the home. To correct the situation, the house must be taken down to the studs and all plumbing and electric must be replaced. My insurance company has threated to drop me for the claims stemming from these issues and when shopping for a new insurance company, they indicated at first they couldn't insure the house for more that {$80000.00} as that is all the house is actually worth. This value issue could have easily been identified going into this deal by not ignoring the changes in the property value from the last listing and the changes in the listing itself. 

It is our understanding under 84 FR 31173 Loan Depot must determine the value of the home using safe and sound banking practices. We believe they intentionally omitted information relating to the value of the home in order to ensure the deal would go through as they were aware I couldn't pay the difference. Willfully overvaluing property regarding a loan, to an FDIC-insured bank, for the purpose of influencing the bank 's actions is also a violation 18 U.S.C. 1014. 

I have asked for their help in correcting the fraud. I've tried to discuss options to mitigate the damage of their misrepresentations such as a deed in lieu of foreclosure. I've tried to negotiate with the seller. Ultimately, the seller and Loan depot acted in concert, both profiting from their misrepresentations, and I request the CFPB 's assistance in unwinding the deal as it failed to meet Reg z and it included willfully overvalued property.

Company response to consumer: Closed with explanation