Consumer complaint received 2018-02-07
Company: SUNTRUST BANKS, INC.
State: TN
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process

Complaint:
On XX/XX/XXXX, I entered into an Access 3 Equity Line Account Agreement with SunTrust Bank in XXXX, TN to mature XX/XX/XXXX ( the Agreement ). The basic terms of the Agreement are as follows : the term is 30 years ; the first 10 years is the Draw Period and the next 20 years is the Repayment Period ; there are 3 distinct Options for making advances and payments ; the interest rate ( APR ) for the Draw Period and the Repayment Period is based on The XXXX XXXX XXXX XXXX XXXX adjusted by a margin. 

I selected Option 2 Advances and my margin was XXXX % for the Draw Period. I made all 120 payments during the Draw Period in a timely manner as agreed. 

On XX/XX/XXXX, I received a call from my customer service representative at XXXX XXXX XXXX concerning the interest rate for the upcoming Repayment Period. She stated that the rate would be 4.94 %, a rate that had been set for all Access 3 Equity Line Account Agreements entering the Repayment Period at the current time. I expressed my dissatisfaction with the rate and asked what options I had with SunTrust Bank. She stated that I could apply for a new Access 3 Equity Line Account Agreement and I might get a better rate. I asked her to start the application process and to send me a copy of my Agreement. As my customer service representative, this lovely lady has been outstanding and professional in every way and I cant say enough good things about her as a SunTrust representative. 

After obtaining a copy of the Agreement and reading it carefully several times, I had questions regarding the arbitrary and inconsistent methodology being used by SunTrust in establishing my APR for the Repayment Period. I then called customer service and asked to be connected to the department that handled questions regarding Access 3 Equity Line Account Agreements. I was transferred to the loan- servicing department and spoke with a representative in XXXX , Virginia . He retrieved my Agreement, reviewed it with me and stated that he was familiar with these loans and that according to my Agreement, the APR for the Repayment Period would be fixed at the APR in effect under the Agreement at the end of the Draw Period - 3.25 % at the date of our conversation ( my APR for the Draw Period had been established at a preferred-rate of The XXXX XXXX XXXX XXXX XXXX adjusted by a margin of XXXX % ). This conversation occurred in late XX/XX/XXXX or early XX/XX/XXXX. 

I then called my local customer service representative and told her that the 4.94 % APR she quoted to me was not the proper APR under my Agreement according to loan-servicing. I explained to her that the rate quoted to me by loan-servicing was the APR in effect under the Agreement at the end of the Draw Period which was acceptable to me. At that time, I asked her to cancel the application for a new Access 3 Equity Line Account Agreement. The loan application was cancelled. 

Upon receiving my XX/XX/XXXX Statement, I realized that something was wrong. My Option 2 Advances ( principal ) had been split between Option 2 and Option 3 and the Option 3 amount had an APR of 4.94 %. There are distinct differences in the Agreement between Option 1, Option 2 and Option 3 Advances and all of my advances have been Option 2 Advances. Per 120 monthly statements, 100 % of my outstanding balance was properly categorized as Option 2. 

I have spoken to numerous persons in the SunTrust Bank hierarchy regarding my issues with their interpretation of the Agreement and the determination of my APR for the Repayment Period. The only person who appeared to have read the Agreement and had an understanding of its terms and conditions was the XXXX, Virginia loan-servicing representative. All other SunTrust personnel simply regurgitated that an APR of 4.94 % was being applied to all Access 3 Equity Line Account Agreements reaching the Repayment Period at this time, and that SunTrust Banks position is that it has the right under the Agreement to unilaterally establish an APR. 

My issues are as follows : Per the Agreement : My APR for Option 2 Advances during the Draw Period is based on The XXXX XXXX XXXX XXXX Rate with a margin of XXXX %. This is clearly a preferred-customer rate. My APR for Option 2 Advances during the Repayment Period is based on The XXXX XXXX XXXX XXXX XXXX. The only margin mentioned in the Agreement specific to me is the preferred-rate margin of XXXX %. The 4.94 % APR unilaterally dictated to me for the Repayment Period is substantially in excess of the rate for a market-rate mortgage. After making 100 % of my payments as agreed for 10 years, how do I unilaterally go from a preferred rate to a rate substantially above market. In addition to my payment history the loan to value for this credit is 48 %. 

I received assurances from the XXXX loan-servicing representative that my APR for the Repayment Period was to be fixed at the rate I was being charged at the end of the Draw Period. He is the only SunTrust representative Ive spoken with that appears to have read the Access 3 Equity Line Account Agreement and is familiar with interpreting its terms and conditions. I ceased looking for a market-rate mortgage elsewhere after speaking with him. 

The Access 3 Equity Line Account Agreement is a poorly written, ambiguous and confusing document. The administration and accounting for the related loans is confusing and inaccurate. As an example, per my XX/XX/XXXX Statement ( copy enclosed ), all of my outstanding balance has been reclassified to Option 3. I have never made an Option 3 Advance. The amortization based on the unilaterally dictated APR appears to be correct but the reclassification of my Balance to Option 3 is inaccurate. If you talk to SunTrust regarding this matter, the regurgitation provided is that during the Repayment Period all Access 3 Equity Line Account Agreements are reclassified to Option 3. Nowhere in the Agreement does it provide for this reclassification. There is a big difference throughout the Agreement between Option 1, Option 2 and especially Option 3. However, for ease of reporting, lack of understanding of the Agreement, general lack of diligence or who knows what, the reclassification is unilaterally made during the Repayment Period. Then SunTrust personnel who havent read the document they are servicing explain the matter as if it is provided for in the Agreement. 

I think it is possible that SunTrust Bank may be trying to eradicate all of the existing Access 3 Equity Line Accounts under the documentation utilized for my loan. The 4.94 % APR offered/dictated to me is so poor and out of line that it is otherwise inexplicable. If thats the case, its unfortunate for those caught in the trap. 

Ive never reported a business for malpractice. I am an XXXX XXXX XXXX XXXX XXXX ( inactive ) and a former member of the Board of Directors of two banks. Ive decided it is time to report this Bank because of the serious deficiencies in loan documentation and general ineptness in their loan-servicing and accounting as it pertains to my above referenced account.

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