Consumer complaint received 2020-11-23
Company: Lo Inc. DBA Reliance Mortgage
State: WA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
Hi, my name is XXXX XXXX and I am resident in XXXX, Washington. 

Because of the dropping mortgage rate earlier in 2020, I contact XXXX XXXX, who is the senior loan office in Lo Inc, Dba Reliance Mortgage , Inc on XX/XX/2020 to work as my loan brokers and helped me work out a refinance plan for my current house ' mortgage. The house address is XXXX XXXX XXXX XXXX, XXXX, WA, XXXX. 

I was provided with a new mortgage rate of 3.375 %, and submitted the loan application around XXXX/XXXX/2020, and managed to close this deal on XXXX/XXXX/2020. Reliance Mortgage later sold this mortgage to XXXX XXXX and I started paying XXXX XXXX monthly as scheduled. 

Later in 2020, the mortgage rate dropped a lot again, and I contacted another loan officer from a different company to start a new refinance on XXXX/XXXX/2020. I was able to close that deal on XXXX/XXXX/2020. 

Everything seemed to be smooth until I was called by XXXX XXXX on XX/XX/2020 telling me that because I paid off XXXX XXXX within 200 days after the closing day, I had to pay a pre-payment penalty which was worth {$15000.00}. Later on XXXX/XXXX/2020, she directly asked me to pay for this amount again and sent me an invoice via email. 

I was shocked by this charge because I did not recall any mention of pre-payment penalty on the closing day ( XX/XX/2020 ). I checked the closing disclosure document which was given to me by Lo Inc, Dba Reliance Mortgage , XXXX on XXXX/XXXX/2020 and also on the closing day XXXX/XXXX/2020. On the document, it specifically highlighted no prepayment penalty. I also called XXXX XXXX, and they confirmed there was no prepayment penalty associated with my mortgage. 

I asked XXXX where was this prepayment penalty mentioned, and she sent me a " The Rate Paid Costs Option Notice '' document that I signed together with another 17 pieces of paper during the mortgage application on XXXX/XXXX/2020. However, I checked all our email communication records, there was not even any mention about the prepayment penalty at all. And the loan disclosure document they sent me on XX/XX/2020 also specifically said there would be no prepayment penalty. 

First, that " The Rate Paid Costs Option Notice '' document did not even highlight the short paragraph mentioning the prepayment penalty. Second, that document directly contradicted with the closing disclosure which specifically mentioned there was no prepayment penalty in highlight. Third, the lender XXXX XXXX already confirmed there was no prepayment penalty associated with my mortgage. Fourth, Lo Inc, Dba Reliance Mortgage , Inc did not remind me such a term in any written email or letters since XXXX/XXXX/2020. I only vaguely remember XXXX told me not to pay off the mortgage early in a phone call on XXXX 2020. 

In the phone call on XXXX/XXXX/2020, XXXX told me her company Lo Inc, Dba Reliance Mortgage , Inc signed a treaty with XXXX XXXX that if I paid the mortgage within 200 days after the closing, her company had to pay XXXX XXXX a penalty, and that is why they need to seek compensation from me. I was not aware that her company had such a deal with XXXX XXXX at all and felt angry that they would ask the customers to paid for the risk without informing them. She told me her company has been doing such things with most of their customers for all these years, which greatly shocked me. 

I was very disturbed by the high and unreasonable charge put by Lo Inc, Dba Reliance Mortgage , Inc, and felt fooled and harassed. If this is a regular prepayment penalty term attached to the mortgage, there was no way that I would miss it during my second refinance process. I would pause the second refinance and wait til the prepayment penalty expired.

Company response to consumer: Closed with non-monetary relief