Consumer complaint received 2021-07-05
Company: Cstone Mortgage Inc
State: NV
Product: Mortgage
Sub-product: FHA mortgage
Issue: Closing on a mortgage

Complaint:
Please be advised that we wish to file a formal complaint against Cornerstone First Mortgage Inc. ( XXXX XXXX. XXXX ) located at XXXX XXXX XXXX XXXX XXXX, XXXX XXXX, XXXX XXXX, CA XXXX and their Loan Originator XXXX XXXX XXXX XXXX NMLS no. XXXX ). Due to their negligence, we were unable to meet the closing requirements on a home we wanted to purchase and lost more than {$6000.00} as a result. 

We are first-time home buyers and found a home in XXXX, NV we wanted to purchase. On XX/XX/2021, we signed a XXXX XXXX XXXX to purchase the house ( see Attachment # 1, 1a, and 1b ). Per the terms of the Agreement, we provided a {$5000.00} XXXX XXXX XXXX and agreed to a proposed settlement date of XX/XX/2021. Immediately after executing the Residential Purchase Agreement we placed an application for a mortgage loan for the purchase of the home with XXXX XXXX XXXX with Cornerstone First Mortgage , Inc. ( hereinafter Cornerstone ). XXXX XXXX and Cornerstone were both referred to us by our Realtor, XXXX XXXX. Our application was for a conventional loan along with a down payment assistance loan from Nevada Housing Corporation. After the application was made, we received requests for documents and information which we believed to be a standard practice for getting a mortgage. On XX/XX/2021 Cornerstone issued us a Closing Disclosure and told us that we were approved for the conventional mortgage loan and the loan from Nevada Housing Corporation ( see Attachment # 2 ). Afterwards we learned that the appraisal had not yet come back which made us wonder how we could be approved without that ; however it did come back and the value and appraisal was acceptable to Cornerstone. At this point we believed that everything was good and that we just needed to go to closing on XX/XX/2021 and we would be homeowners. Our goal of owning a home before our wedding was going to be a reality! However, our dreams were shot down when on XX/XX/2021 we received a call from XXXX XXXX at Cornerstone telling us that due to changes in the income levels at Nevada Housing Corporation, we no longer qualified for the loan. To receive this kind of phone call 2 days prior to closing was a complete shock. We looked up the alleged changes on the Nevada Housing Corporations website and learned that the income requirements increased and did not decrease so we were confused about why we no longer qualified for the loan. We also learned that the income changes were for loans registered after the publication date which should not have impacted our loans since we were told we were already approved. It was then that we learned that Cornerstone never submitted our loan request to Nevada Housing Corporation and were never formally approved by Nevada Housing Corporation and that our loan was not approved as represented to us by our Loan Originator XXXX XXXX XXXX. Without the down payment assistance loan, we were not going to be able to meet the requirements for conventional financing. We could not believe what was happening. In an attempt to fix their error, Cornerstone suggested that we go FHA and that they could meet the new closing date of XX/XX/2021. On XX/XX/2021 Cornerstone issued us another Closing Disclosure, this time for an FHA loan, and indicated that we would close on XX/XX/2021 ( see Attachment # 3 ). However, when the Seller was approached with this news, they demanded that in order to give us the necessary extension, that we release the XXXX XXXX XXXX to them immediately. Since Cornerstone represented to us that they could make the new closing date, we agreed to release the funds. Cornerstone told us that all they needed to do was have the conventional appraisal re-done to an FHA appraisal and we would be able to close. Then, on XX/XX/2021, two days after the date Cornerstone represented they could close us by, Cornerstone called and said they had to do a new employment verification on XXXX and that since he is a union employee of the XXXX who is assigned out by the union to different jobs, each job he was assigned to was considered a new job and that he may not qualify as a result. We asked why this was an issue on the FHA loan and not on the conventional loan, however we never received a satisfactory response. Cornerstone faxed an Employment Verification document to the union late on XX/XX/2021, however a response was not received back in time to make the new XX/XX/2021 closing date. We were also puzzled why Cornerstone put a XX/XX/2021 Closing Date on the new Closing Disclosure when they knew or should have known that they were not going to be able to make that date. After this debacle ended, Cornerstone asked us to withdraw our loan application which we declined to do. We were hoping that Cornerstone would issue us a Statement of Credit denial form and that perhaps we could appeal to the Seller to return our XXXX XXXX XXXX  since we were not the cause for not getting the loan approval. However, as of the date of this letter, Cornerstone has yet to issue us a Statement of Credit denial which we thought under law they were required to do. 

As a result of Cornerstones performance with our loan request, the Seller refused to grant any further extensions and we lost not only our {$5000.00} XXXX XXXX XXXX, but also two appraisal fees and other costs totaling {$6500.00}. We believe that Cornerstone should refund us the amount of money we lost due to their negligence and outright lies regarding the approval of our loan and the manner in which our loan request was handled. It will take us quite a long time to try to save up again the money that we lost as a result of this matter and we did nothing wrong. We also believe that you, the Consumer Financial Protection Bureau, should investigate this company to ensure other prospective borrowers are not treated as poorly as we were.

Company response to consumer: Closed with explanation