Consumer complaint received 2021-01-26
Company: TD BANK US HOLDING COMPANY
State: NJ
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
I currently have no traditional first mortgage on my home. I just have a {$500000.00} HELOC from TD. 
In XX/XX/XXXX I approached TD about getting a traditional fixed rate mortgage from them and having them subordinate my HELOC. 
On XX/XX/XXXX provided me with a Loan Estimate for the mortgage with list of closing items and costs associated. 
On XX/XX/XXXX offers : Option 1 : Reduce loan amount to XXXX paying home equity line down and reducing the line availability to XXXX instead of XXXX. 
Option 2 : Reduce loan amount to XXXX ( paying XXXX toward and keeping heloc availability at XXXX. 
In other words, the combination of mortgage and HELOC notional is {$710000.00} or 80 % of appraised value. Eventually {$330000.00} mortgage and {$380000.00} HELOC was agreed. 
In anticipation of closing the new loan and subordination the HELOC with reduced notional, on XX/XX/XXXX and XX/XX/XXXX TD issues a Closing Disclosure. The CD has about {$700.00} of additional fees that were not disclosed on the original XX/XX/XXXX Loan Estimate.

TD could not explain why there was suddenly new fees. The title company agrees to waive some of the additional costs but TD will not agree to waive the remainder. Due to this unprofessional, unethical and possibly illegal last minute attempt by TD to squeeze me to make me pay additional fees I do not close the mortgage with them and approach other lenders.

I work with a new lender who provides me with a Loan Commitment on XX/XX/XXXX. 
We started the subordination request with TD at the end of XXXX/beginning of XX/XX/XXXX and it took almost six weeks for the TD Subordination department to even review the request ( XX/XX/XXXX ). I have spent many hours over the past two months trying to get general updates and responses to the request generally without success. 

On XX/XX/XXXX We received the following response from TD : " XX/XX/XXXX SUBORDINATION REQUEST IS CONSIDERED DENIED WITH A COUNTEROFFER FOR A LIMITED CASH OUT ONLY. BORROWER AND CO-BORROWER FICO BELOW MINIMUM GUIDELINES ; VALUE OR TYPE OF COLLATERAL NOT SUFFICIENT. PRIMARY BORROWER FICO 2 SCORE OF XXXX AND CO-BORROWER FICO 2 SCORE OF XXXX ARE BELOW MINIMUM GUIDELINE OF XXXX. CURRENT CLTV OF 87.31 % EXCEEDS MAX ALLOWED OF 80.00 %. MAILED ADVERSE ACTION LETTERS TO EACH CUSTOMER AT MAILING ADDRESS ON FILE.

Counteroffer for limited cash out : Limited cash out would be after paying off first mortgage and closing costs only, customer not receiving more than {$2000.00} at closing. For this we would need updated loan documents reflecting this request as a limited cash out. Any loan amount changes would require updated XXXX, XXXX, Commitment letter, Closing Disclosure and Title. '' On XX/XX/XXXX we respond back to TD accepting the counteroffer and providing the requested documents. 

On XX/XX/XXXX TD responds : " After re-review, we are currently 1st & only mortgage lien. Borrowers are obtaining a new 1st mortgage and using proceeds to pay our HELOC off but NOT close it. This would require a Cash Out subordination. As both borrowers ' FICOs are below our min. requirement of XXXX, the decision to DENY stands ; there is NO Counter Offer available. '' In other words TD made a mistake and rescinded their counteroffer.

I send an email explaining to TD why they should approve from a risk perspective. I also mention that TD had agreed to the subordination ( with reduced notional ) of the HELOC when TD was going to be the mortgage provider and that TD 's refusal to approve the subordination now with a new lender was a violation of anti-tying banking rules. TD responded that the subordination was still denied.

Company response to consumer: Closed with explanation