Consumer complaint received 2021-10-11
Company: Sovereign Lending Group, Incorporated
State: TN
Product: Mortgage
Sub-product: VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
In late XXXX or early XXXX I was contacted by Sovereign Lending Group who I used to refinance my loan in XXXX. My current rate is 4.25 % and they stated they could me a rate at 2.99 %. I then explained to the gentleman who called that I had been in a CARES act Pandemic Forbearance that was ending on XX/XX/XXXX. The gentleman stated that's okay, with the VA we can refinance immediately once the forbearance has ended and all missed payments can be rolled into the new loan. I agreed to move forward and sent them a {$500.00} deposit that was to cover the appraisal cost. The VA appraiser came out and the appraisal came back better than expected so we were excited to move forward. On or about XX/XX/XXXX I was told that the VA had a seasoning requirement that required the loan to be out of forbearance for 1 month before they could refinance the loan. The loan processor told me everything was good and the closing would be scheduled for XX/XX/XXXX. On XX/XX/XXXX I was contacted by the loan processor who told me that the underwriter wanted the loan to be brought current before she would give a clear to close. This meant I would need to pay all of the missed pandemic forbearance payments in one lump sum before we could close. I was able to get a friend to front me the {$26000.00} needed to bring the loan current. When I called back to Sovereign to let them know I was bringing the loan current they then told me that they still couldn't close as the VA has a requirement that the loan has to be out of the Pandemic forbearance for 6 months before it is eligible for a new VA loan. I immediately called the VA 's loan production office to inquire about the requirement. I was told by the VA representative that there is no requirement by the VA of a waiting period after exiting the CARES act pandemic forbearance. The VA representative stated that maybe the underwriter was confusing the 6 month seasoning period after the origination of the loan. He was nice enough to check my VA loan lumber and verified that I had met all seasoning requirements and that from the VA side there would not be any further seasoning requirements regardless of the forbearance. I then e-mailed and called my loan processor at Sovereign Lending group to tell him what the VA had told me. He stated he would have a underwriter manager look at this again. I asked him if they could just call the VA to verify that there is not a VA requirement, it took me less than 5 min. He said the underwriters do not call the VA to verify information. It took an entire week for a manager to supposedly review if there was a waiting period or not, I got the response from Sovereign Lending on Friday XX/XX/XXXX, that my loan was being denied because my loan had been in the Pandemic Forbearance and that the VA has a 6 month waiting requirement after exiting the CARES act Pandemic Forbearance. I verified with the VA that was is completely incorrect. If Sovereign Lending is an expert in VA home loans, why would their sales person call me and tell me they could refinance after exiting the forbearance program with no waiting period and then the underwriters state no we can not move forward because there is a VA waiting requirement. Now I am out {$500.00} for the appraisal, hours upon hours of my time and the cost of a wood destroying insect inspection. This all took 2 months and if there is a requirement of a 6 month waiting period ( which again I verified with the VA that there isn't ) I should have been told that up front and not have waisted my time and money.

Company public response: Company believes the complaint is the result of a misunderstanding
Company response to consumer: Closed with explanation