Consumer complaint received 2023-05-17
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: TX
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
My wife and I attempted to borrow money from Bank of America ( BoA ) for the purchase of a second home. We are 20+ year customers of BoA and thought because of the existing relationship, they would be a good choice for a loan. 

However, what we experienced was BoA perpetuating a bait and switch scheme by offering highly attractive loan pricing, failing to honor that pricing, and then offering to " save '' the loan by requiring a more expensive product. 

BoA made major changes to our loan pricing THREE TIMES in the 11 days surrounding our closing date, despite NO CHANGE in our financial structure or obligations. During the loan process, we sold stock, incurred expenses, and paid down specific debt at the direction of BoA, causing us undue and unrecoverable financial loss. 

BoA should not be allowed to continue doing business in this way. 


Here are the details and timeline of our experience : XX/XX/XXXX : Purchase agreement executed. Target closing date is set to XX/XX/XXXX. 

XX/XX/XXXX : FIRST SET OF LOAN TERMS. Bank of America ( BoA ) sends an official pre-approval letter for 15 % down, 6 %, 30 year fixed for a second home. 

XX/XX/XXXX to XX/XX/XXXX : We begin selling stock and moving cash into our BoA account to prep for closing. All documents are provided per BoA requests. BoA assures us that we are on track for a XX/XX/XXXX closing. 

XX/XX/XXXX : 8 days before closing. BoA tells us my credit report has " expired '' and they need to pull a new one. 

XX/XX/XXXX : 7 days before closing. BoA sends us a draft closing disclosure in the XXXX  with the original terms ( 15 % /6 % /30 fixed ). In the XXXX, they tell us my credit score has dropped from a XXXX to a XXXX even though nothing has financially has changed ( no new loans/expenses, no job loss, etc ). All existing debt/income has already been disclosed to BoA via their requests or the previous credit report. BoA claims, that given the new credit score, it can no longer honor the original pricing from XX/XX/XXXX. BoA then sends us a new draft closing disclosure that has 1.7 % in points - a 1.4 % increase from the XXXX  closing disclosure. This is roughly an additional XXXX XXXX  lender closing costs that would get paid directly to BoA. 

XX/XX/XXXX : 4 days before closing, SECOND SET OF LOAN TERMS. BoA presents an alternative loan. We can put down 20 % ( instead of 15 % ), pay near zero points, and continue with 6 %, 30 year fixed term. We reluctantly agree to this under protest that BoA has no standing to change the terms at all. 

XX/XX/XXXX : 3 days before closing. We sell additional stock to cover the increase in closing funds required. We incur losses on these sales because we are unexpectedly having to sell losing positions. 

XX/XX/XXXX : 2 days before closing. We are told that due to the change in my credit score, the debt/income ratio acceptable to BoA has dropped from 45 % to 43 %. BoA tells us that we are now REQUERED to pay down some of our existing debt ( to lower our monthly payment obligations ) if we want to move forward. 

XX/XX/XXXX : 1 day before closing. We pay off roughly {$4000.00} in debt, that we otherwise would not have paid off, per BoA 's direction. Proof of payment is sent to BoA. We are told BoA will not be ready to close on the original closing date of XX/XX/XXXX, but that there will not be much delay. 

XX/XX/XXXX : Original closing day. BoA inquires about a field on the proof of insurance statement the carrier has sent to them. The field specifies that the property will be rented out " for more than 30 weeks '' per year. The information on the insurance form is not correct. BoA asks for, and we provide, a written explanation that the information is inaccurate and that the carrier had arbitrarily chosen the number without consultation. The carrier sends over a revised insurance policy PER THE INSTRUCTIONS OF BoA, changing the rental weeks to 11. Pricing for the insurance does not change with the reduced number of weeks, making the number all but irrelevant. We are told that the loan will close early the following week. 

XX/XX/XXXX : 3 days after expected closing. Despite a follow-up email from the insurance carrier, BoA tells us that they will not accept the correction on the insurance form. BoA considers the original number excessive for a second home, and despite a reasonable explanation now requires us to use an investment loan. BoA will now not move forward with the 20 % down/6 % /30 year fixed loan they agreed to on XXXX. In order to proceed, BoA will need to treat the property as an investment loan, which requires new loan pricing. BoA tells us they will get back to us soon. 

XX/XX/XXXX : 4 days after expected closing, THIRD SET OF LOAN TERMS. BoA gives us pricing for the purchase using an investment loan. The new loan terms will be 25 % down, 7 % interest for a 30-year fixed. It is unclear if any points are required. This loan would require an ADDITIONAL XXXX XXXX down, minimum. We tell them the terms are not acceptable and we will not proceed. We are forced to go back to sellers and tell them our financing has fallen through.

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