Consumer complaint received 2022-05-16
Company: Home American Mortgage Corp
State: MD
Product: Mortgage
Sub-product: VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
To whom it may concern, I am filing this complaint regarding a tentative future home purchase, and a loan approval with option to rate lock interest at no cost for VA loans. This complaint is based on the actions of XXXX American Homes ( XXXX ), and its affiliate loan company , Home American Mortgage Corporation ( HAMC ). The XXXX had a " single point of failure '' ( non-availability of authorized personnel to conduct transactions ) which resulted in the buyer ultimately missing out on the opportunity to take advantage of the Interest Rate Lock Program ( IRLP ), and locking in base price of home. This IRLP program was unexpectedly cancelled when communication was re-established resulting in a huge interest rate increase and ultimately a tremendous spike in the monthly payment for the buyer. In addition, the buyer was exposed to 'bait and switch ' tactics to include erroneous property listing information, price fluctuations, failure to fully disclose and causing unnecessary delays, disparate practices ( Veterans vs non-Veterans ) and misleading buyers by exacerbating price spikes ( i.e., alleging if buyer attains a realtor a price increase to home would be imposed, or not acting ( now ) would result in price spikes although seller delayed responding to buyer ). 

The following provides a synopsis of a few events from the most recent encounter ( not limited to ) and also, attached a couple of emails to depict the dialogue with XXXX and HAMC. 

After entering into a purchasing agreement on XXXX XX/XX/XXXX, attaining VA loan approval on XXXX XX/XX/XXXX, and IRLP disclosure on XXXX XX/XX/XXXX- I immediately started to request for interest rate lock information starting on XXXX XX/XX/XXXX after reviewing loan approval documents. The Loan Officer provided fragments of information ( intermittently ), however, never adequate enough to make an informed decision ( regarding program specifics ). I reached out to the XXXX HAMC Loan Officer on XXXX XX/XX/XXXX, to remind her I had not received a response to my email, as my intent was to participate in the IRLP. Despite repeated attempts to attain full clarity, contact made via phone and email, I finally attained full disclosure that was understood on XXXX XX/XX/XXXX ( email from Loan Officer listed below ). It took nearly six ( 6 ) days for a response which could had been quickly resolved by returning of a phone call or picking up the phone to advise the buyer. 

Exactly one day following the response, on XXXX XX/XX/XXXX, I was advised the program was terminated with no advanced notice. The XXXX HAMC Loan Officer stated very specifically, I wanted to let you know we received word yesterday that the extended rate lock program is no longer being offered, effective immediately. Nevertheless, XXXX and affiliate HAMC reestablished the Interest Rate Lock Program, on XXXX XX/XX/XXXX, with extra benefits for buyers attaining non-VA loans and kept the no cost to buyers attaining VA loans. However, the sudden interruption of the Interest Rate Lock Program ( IRLP ) penalized the Veteran or buyers with VA loans because during such timeframe the interest rate increased significantly. Fortunately, now buyers with approved non-VA loans can also benefit by now having a XX/XX/XXXX split of the cost to participate in the program, by contrast the Veterans who already received a VA loan approval prior to terminating the program, are now expected to purchase points to retain the previous prevailing interest rate ( that was originally at no charge ). 

The action of XXXXAH and its affiliate HAMC, appeared to be very deceitful, disingenuous and discriminatory ( disparate ). I was further led to believe these tactics were very deliberate with intent to cause harm to Veterans based on assertions made by the XXXXAH Sales Representative XXXX XXXX ) on approximately XXXX XX/XX/XXXX, while visiting the XXXXAH Sales Office at XXXX to finalize discrepancies made by the assigned Sales Representative. I was informed by the Sales Agent ( XXXX ) during my visit that I would not be able to participate in the program because it would cost the builder. This assertion directly aligned to the Loan Officers email on XXXX XX/XX/XXXX ( extracted below ), however, the way it was conveyed it was in a displeasing and disapproving tone. After leaving the sales office, I conducted additional research and located the language on the XXXXAH website, which clarified the rate lock program existed and for VA loans there was not a cost associated to participate. Therefore, if the interest rate dropped the builder ( not buyer ) would pay to float down the interest rate at the prevailing rate originally offered to the Veteran. This was contradictory to what was expected for non-VA loans ( apparently there was a cost involved to participate in the program until XXXXAH/ HAMC instituted a strategic pause and reinstated with new incentives for the non-VA loan buyer ). 

On XXXX XX/XX/XXXX, I was offered to participate in the reinvigorated program after it was relaunched but to my surprise with higher interest ( 5.37 % ) and option to buy down points to keep the original 3.5 % rate offered ( the Veterans/ VA loans were not godfathered to retain original benefits/ incentives ). Not only does it appear XXXXAH and HAMC partnered to intentionally cancel the program to avoid having to pay out of pocket to retain the lower interest rate for VA loans, it also appeared it was adversely and unfairly targeted at Veterans. As mentioned, when the program was reestablished about a month later the same VA loans that were already approved prior to the immediate no notice termination of the IRLP continued to still be at no cost but now there are inherent cost to buy-down interest points ( to rates that were previously available to the Veteran ). Prior to terminating the IRLP, non-VA loans were subject to charges and upon reestablishment of the program it was reinstated to a XX/XX/XXXX split among XXXXAH/ HAMC and the non-VA loan buyer. So, what was the reason and intent behind terminating the program? To hurt ( defraud ) or to help buyers who are not entitled to VA loans vs those who are entitled. If the answer was to help both demographics ; the program should had continued for those that it benefited ( Veterans ) and paused to integrate additional benefits to aide non-VA loan buyers. Essentially it caused harm to one group with no explanation and leveraged the other. IN this case it caused an adverse impact to me my mortgage is expected to go up nearly {$700.00} per month due to the termination of the program, and for failure of the XXXXAH and HAMC to disclose pertinent information in a timely manner to the consumer/ buyer to make an informed decision. In addition, the XXXXAH and HAMC ( as a corporation ) failed to notify the Veteran of the consequences which would have allowed greater participation, and been advantageous to both group of buyers ( i.e., no cost Veteran program and XX/XX/XXXX split for non-Veteran ). 

The aforementioned has been my experience with RAH since my encounter contradictions to original offering and lack of transparency. For example, during the purchase of the XXXX home originally listed as one price ( lower ) and after proceeding with the sales process, I suffered surprises with the sudden price spikes and provoked sales tactics ( i.e., if you dont act soon, my colleague will sale to someone waiting to buy or it will go up after they buy by $ XXXX or more ). I was advised last Friday, to this date, the same lot # XXXX has not sold ( after three months earlier receiving erroneous price information and assertions/ threats others will buy if I dont act now ). 

The rationale for the disparity appeared always linked to the buyer ( me in this case ), the information was wrong, the sales or design center rep is new, or there were glitches in the system. The constant the buyer me it was always to my detriment. Considering the race to buy a house across the United States, it appeared the sale tactics caused unnecessary chaos and provoked unnecessary competition and scare with assertions the price of the home will jump and after sealing a deal, the calls congratulating you because the buyers future home is allegedly already worth more based on other recent sales i.e., your home is now worth $ XXXX, $ XXXX, and $ XXXX more. However, when the XXXXAH reduced the base price, in my opinion, to lure other potential buyers no one called to say hey your future home just went down by $ XXXX ( before breaking ground, before attaining a permit to build, before attaining the site plan, etc. ) which is what I explained today to the VP of Sales based on the recent reduction of the XXXX. 

I sought to remedy my concerns via XXXXAH and HAMC, and requested : 1. Primary remedy : Honor the interest rate at the time of my contract and loan approval based on the Loan Officer not responding and causing me to forfeit the opportunity to participate in the rate lock program, at 3.5 %. The Senior Manager researched my complaint, and advised today everything I advised checked out and my story aligned with the HAMC Loan Officer ( who profusely apologized according to XXXX XXXX XXXX ). However, I would not receive the original interest rate offered under the rate lock program, but instead of 3.5 % RAH/ HAMC would concede and authorize 4.75 % ( floating down from the new offered interest rate of 5.37 % ). He further explained, although I have other problems in the process he stated he was shrugging his shoulders because it did not fall within his lane. I advised him the lanes became blurry because the VP of Sales indicated XXXXAH/ HAMC will not concede because several home buyers in similar situations are also complaining so basically jump in line. In addition, because HAMC is an affiliate of XXXXAH, for the buyer Sales vs Loan is integrated and unfortunately has a dual-impact to buyers. Therefore, I am not shrugging my shoulder.

2. Seeking for VP of Sales, XXXX XXXX XXXX, to fully honor reduction in price of hopefully future home based on all that occurred and attaining erroneous information. The delay tied to reconciling the error, resulted in the alternative home/ lot offered being offered at a higher rate while being denied by RAH to honor the listed price. The XXXXAH website now lists the XXXX at $ XXXX ( today ) and on Saturday at $ XXXX. I specifically asked the Sales Representative in the beginning of the process, what would happen if a significant reduction in cost prior to breaking ground, closing, etc ; and advised they would probably have to honor the sales price listed. 

Email sent on XXXX XX/XX/XXXX, from HAMC Loan Officer affiliate of XXXXAH : Hi, You would not receive any of the funds that the builder pays to participate in the long term lock. 
The upfront fee is a non-refundable fee paid to the mortgage company by the builder. 
So its the builder paying this cost on your behalf, not the lender. 

The builder will still pay the closing incentive indicated in your Purchase Agreement through the use of HMC. In effect, the builder is paying the agreed upon closing costs ( per the contract ) PLUS the upfront fee of participating in the long term lock. This is the case for VA loans only on all other loans types, the customer pays the non-refundable fee to participate in the long term lock program. 


Email sent on XXXX XX/XX/XXXX, from HAMC Loan Officer affiliate of XXXXAH : Hi, I hope youre well this evening. 
I wanted to let you know we received word yesterday that the extended rate lock program is no longer being offered, effective immediately. 

I wanted to reach out in case you were still considering it. 
Thank you and take care.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation