Consumer complaint received 2023-11-05
Company: GUARANTEED RATE INC.
State: MI
Product: Mortgage
Sub-product: FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage
Sub-issue: Application denials

Complaint:
On XX/XX/23, I applied for a FHA XXXX XXXX XXXX. All documentation was sent to the lender as requested and on XX/XX/23 my application was forwarded onto the next stage with a renovation specialist, the XXXX XXXX XXXX XXXX XXXXXXXX to be exact. On XX/XX/23, I received a phone call of denial for the loan. 

When the specialist called, he started by stating he could give me the short story and if needed he could give me the long story, but essentially told me they were not going to move forward with this loan. He briefly stated that there was too much of a spread between what the bank was permitted to charge in fees vs what would be needed to complete the loan. I told him I did not understand and that he needed to provide me the long explanation and give me the exact difference in the amount. He told me there was about a {$2700.00} difference between what was needed vs. what my request came in at. I stated to him {$2700.00} on a loan amount of $ XXXX seemed minor and I asked him what need to be done to close the gap. Also, I pointed out that the amount needed for the renovation was my " guess '' and not a detailed estimate from a contractor. I did not understand how such a formal decision could be made so quickly with limited information. He attempted to expound with a bunch of financial jargon and even went as far as to say that my quoted interest rate of 8 % was not valuable enough in today 's market. He then added I needed to give wait to apply a little longer and restated that there was nothing that could be done. This went on for about XXXX which was very tiresome as there was a lot of casual laughing on his part as if I was asking humorous questions. To close out the conversation, I asked him " just so that I am on the same page, you are telling me there is nothing wrong with my credit, my finances, but this loan is not profitable enough for your institution? Is that correct? '' He responded by saying not exactly but offered more of the same explanation. I then asked him if he could send his response to me via email, to which he responded he could somewhat explain it in an email. 
The next day on XX/XX/23, I received the official denial letter from the institution telling me that I was denied on the basis of credit. This is NOT in any way what was stated on the phone or in the email I received. 
Keep in mind a few things : XXXX ) The FHA min score is XXXX for a loan of this type and my XXXX XXXX XXXX score is a XXXX, so I am most certainly above the minimum. 
XXXX ) I carry very little debt, under $ XXXX with roughly 1 % utilization on $ XXXX of available credit. 
XXXX ) My income is over $ XXXX. I requested $ XXXX on a XXXX fixed loan which is relatively small in today 's time. This is a XXXX refi loan on a home I currently own with an estimated $ XXXX XXXX and under $ XXXX on the current mortgage balance. 

It is my suspicion there was wrongdoing and lack of diligence in the decision-making process which resulted in my wrongful denial based on credit. If the loan was unprofitable for the institution, then that is what should have been stated on the denial letter as told to me by the VP. For the institution to blame me by wrongfully, stating denial due to credit unworthiness is ethically wrong and illegal. 
I ask that the CFPB investigate this matter as this should not have happened. 
Thank You

Company response to consumer: Closed with explanation