Consumer complaint received 2021-05-21
Company: NAVY FEDERAL CREDIT UNION
State: MO
Product: Mortgage
Sub-product: VA mortgage
Issue: Closing on a mortgage

Complaint:
I closed on my loan on XX/XX/2021. Prior to closing, I attempted to settle fees that were charged in excess of the amounts originally disclosed as defined in 12 CFR 1026.19 ( e ) ( 3 ) ( i ) and ( ii ) due to missed timelines in providing revised disclosures as outlined in 12 CFR 1026.19 ( e ) ( 4 ) ( i ) and also by misplacing a required fee in the incorrect section of the closing disclosure as outlined in 12 CFR 1026.37 ( f ) and ( g ) and 1026.38 ( f ) and ( g ). When attempting to rectify the issue with XXXX and the processors, my complaint was not researched even though I provided the information and I was told that " if I believe that there is an issue with timing that I should file a complaint with the CFPB. '' Issue 1 : Origination fee charged in excess of the amount originally disclosed. 
Timeline : XX/XX/2021 : Application submitted XX/XX/2021 : Initial XXXX provided with XXXX of {$290000.00}, Rate : 3.25 %, no origination fee. 
XX/XX/2021 : Provided competitors XXXX to XXXX for price match and locked rate. 
XX/XX/2021 : Revised XXXX issued with LA of {$260000.00}, Rate 2.75 %, Origination fee of {$1300.00} ( .5 % of the LA XXXX. 
XX/XX/2021 : loan conditionally approved and sent to the processor. 
XX/XX/2021 : held initial conversation with the processor. Asked about buying down the rate for informational purposes. Was told that to buy down the rate to 2.625 % it would increase the origination charge by .5 %. 
XX/XX/2021 : assigned to a new processor ( second processor ) XX/XX/2021 XXXX Sat ) : emailed three contacts at XXXX including the new processor stating I would like to increase the LA to {$270000.00} and buy down the rate to 2.625 %. 
XX/XX/2021 : spoke with the new processor over the phone and again indicated my wish to increase the LA to {$270000.00} and buy down the rate to 2.625 %. 
XX/XX/2021 : Revised LE provided with LA of {$270000.00} and rate of 2.75 % with an origination charge {$1300.00}. ( 10 business days after the initial written request XXXX XX/XX/2021 : Revised LE provided with LA of {$270000.00}, rate of 2.625 % and origination charge of {$2700.00}. ( an increase of .5 % ) XX/XX/2021 : CD issued. 
XX/XX/2021 : acknowledged CD via email and also asked if the increase in the origination fee was within tolerance requirements. No response from the processor. 
XX/XX/2021 : Corrected CD provided with no changes to the origination fee or credits to offset the increase due to missed delivery timelines. 
-Called main NCFU mortgage number, contacted the second processor who called me back. I explained my concern. Ultimately told origination was in tolerance because XXXX had three business days to provide disclosures from the date they entered the information into their system not when they received the information. Regulation Z ( 12 CFR 102619 ( e ) ( 4 ) ( i ) ) requires that if a creditor uses a revised estimate for the purpose of determining good faith, the creditor shall provide a revised version of the disclosures reflecting the revised estimate within three business days of receiving information sufficient to establish that one of the reasons for the revision. 
-Processor 's supervisor ( the original processor ) called, I explained the issue and was told the same thing and that if I thought there was an issue, I should file a complaint with the CFPB. 
-Signed closing documents and submitting this complaint. 

Increase in Origination Charge in excess of the amount originally disclosed due to missed delivery timeline of three business days : {$1400.00} the second processor received the information sufficient for the reason for redisclosure ( revision requested by the consumer ) on XX/XX/XXXX. 2021 but did not deliver disclosures until XX/XX/XXXX and XX/XX/XXXX XXXX ten and 14 business days after receiving the information ). 

Issue 2 : Termite Treatment for VA loan in wrong section on CD XX/XX/2021 : Initial XXXX and XXXX XXXX written list of service providers ) issued. Initial LE shows aggergate cost for items the consumer can shop for as {$1100.00}. XXXX shows XXXX as the service provider for the inspection. Treatment is not listed. 
XX/XX/2021 : Termite inspection completed by XXXX and noted termites on the property XX/XX/2021 : Initial termite treatment XX/XX/2021 : corrective action completion provided to the original processor via email XX/XX/2021 : initial inspection form and receipts provided to the original processor via email XX/XX/XXXX and XX/XX/XXXX : revised XXXX issued without disclosing the cost of the treatment. 
XX/XX/2021 : second processor provides email stating proof that termite treatment was completed or the loan can not close. This indicates that the treatment is required by the lender. 
XX/XX/2021 : CD issued with Termite treatment listed in Section H - Other ( services not required by the lender ) rather than in Section B - Services the Borrower Did Not Shop for. 
XX/XX/2021 : emailed second processor highlighting the concern and asking for clarification - no response. 
XX/XX/2021 : Corrected CD issued but no changes to Termite Treatment Spoke with the second processor who confirmed the service was required but listed in Section H because it was not required in all states which is not loan specific. Spoke with the original processor who explained the breakdown of the treatment of the amounts paid at and before closing. Original processor explained that any amounts outstanding ( even if already being paid through installment payments to the provider outside of closing ) was required to be settled at closing. 

This indicates that XXXX requires the treatment when identified in the inspection in order to close the loan. As such, the fee should be in section B of the CD as the provider was the one listed on the XXXX. If the termite treatment were disclosed here, it would cause a tolerance issue that was not cured. The new total of services that I could have shopped for but did not under the regulation is {$2600.00} which is greater than the amount allowed of {$1200.00} XXXX which is 10 % more of the aggregate amount listed on the initial XXXX XXXX.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation