Consumer complaint received 2019-01-25
Company: Security National Financial Corp
State: HI
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
I contacted XXXX XXXX XXXX XXXX, a mortgage broker in XXXX, Hawaii, in XX/XX/2018 in regard to getting a USDA loan to buy land and build a home. The branch manager at the XXXX office, XXXX XXXX, told me that there was a new USDA mortgage program available in Hawaii that would allow me to make a land purchase and finance construction all in a single close loan with very little money down. I was also told that no payments were required during the construction period and that repayment would not begin until construction was finished and I was living in the home. XXXX XXXX, a loan officer from the Security National office in XXXX, confirmed this as well, explaining that interest would accrue during construction and the loan would be " recast '' when construction was finished with the accrued interest being financed into the loan. How this process worked was not entirely clear to me so I asked XXXX and XXXX on a number of occasions over a period of several months to please clarify exactly how the no payment program worked and asked them to please reaffirm in writing to me that there would not be any payments. I received my assurances from XXXX and XXXX that this was indeed the case so I proceeded with the loan. At closing I noticed that one of the documents stated that repayment would begin right away. I stopped the closing process and told XXXX XXXX, the Security National loan officer who was present, that if I truly did have to begin repayment right away that I would have to walk away from the loan right there as I could not afford to pay a mortgage payment alongside my present rent. XXXX was adamant that I did not understand how the loan worked, that I did NOT have to begin repayment until after construction on the home was completed. XXXX pointed me to another document that stated payments for 12 months were covered and assured me that I did not have to worry, that I would not need to make any payments until I finished construction. My realtor was also present at the closing and witnessed what happened along with what I was told by XXXX XXXX. About two months after closing I received a bill in the mail from XXXX XXXX XXXX of Texas for my first Mortgage payment. I immediately called XXXX XXXX  and asked them why I was getting billed when my agreement had stated that no payments would be made for 12 months. The representative from XXXX XXXX  was surprised I had been told that by Security National and explained that the no payment option with accrued interest being financed into the loan after construction completion did not exist and that payments were required right away for the type of USDA loan I had received. I subsequently contacted XXXX XXXX and XXXX XXXX at the XXXX XXXX XXXX   XXXX XXXX XXXX office and told them that they had to fix this problem, that they had misrepresented the loan that I was sold as being something entirely other than what it really was. XXXX suggested that one option I might take to fix the problem would be to go get a land loan from another bank to pay off the USDA loan. I told XXXX and XXXX that they needed to find a much better solution than that, XXXX assured me that she would work har to try and fix things. Two weeks went by with no solution forthcoming from XXXX so I contacted her in writing and asked to have an answer as to what Security National planned to do. XXXX said that she was working on it. I asked that she either find a solution or refund all of the money that I had paid to secure the USDA loan. Another week went by with no solution from XXXX and Security National, apparently XXXX had left to go on vacation, in the meantime my anxiety and distress continues to build as I am faced with a large mortgage payment on top of my already existing rent with no clear solution. I just went through XXXX XXXX and I do not need this level of worry right now, I certainly hope someone can help me resolve this severely distressing situation.

Company response to consumer: Closed with explanation