Consumer complaint received 2021-09-20
Company: DISCOVER BANK
State: MT
Product: Mortgage
Sub-product: Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
I first applied for my Home Equity loan from Discover Bank on XX/XX/21. I went through the initial steps with XXXX XXXX and explained to her that I was looking to get a second mortgage on my home to consolidate some debt and some other things. At that time, I had explained to her that my first mortgage lien was held by a Private Party with a Owner-Carry Contract. My name is on the DOT and there is a Promissory Note that is filed and enforced by a local Payment Servicing Company. On XX/XX/21 a XXXX XXXX reached out to help get some of the documents together to work through the application. I also spoke to her about the Owner Carry Contract. On XX/XX/21 I was contacted by a XXXX XXXX who was looking for different items that were needed and informed me that I would also be working with XXXX XXXX. They did not like the statement provided by the Payment Servicing Company for my Owner Carry Contract and we were working on gathering additional information to make sure that it was all penciling out in underwriting. On XX/XX/21 I received an offer of credit from Discover Bank for XXXX. I accepted the offer and they explained they would move my file to the next step and order the additional 3rd party documentation. On XX/XX/21 I was contacted by XXXX XXXX who informed me that he would be my main processing point of contact. In his email he stated he was working on my Title Report which would have also shown a private party as my lien holder. XXXX reached out again on XX/XX/21 to let me know that the appraisal could take up to XX/XX/21 to complete and asked if I wanted to continue with my loan. I told him yes. The same day, the appraiser came to my house for his review. On XX/XX/21 I received an email from XXXX XXXX XXXX letting me know that my house was appraised and the loan was going through final underwriting. I asked how soon the loan could close, and he said assuming that the numbers are all still good, it could take 10-15 days until its completely done. On XX/XX/21 at XXXX I received an email stating that my loan had been denied due to " Insufficient First Lien Holder ''. When I called, I spoke to XXXX who told me that it was Discover Banks policy to not do a 2nd mortgage when the first lien was held by a private party. She explained that I should have never made it past the application process once they knew that I had a private party as a property lien. I have asked for a call from a supervisor and have still not received one. I am extremely upset as this process has gone on much longer than it should have. As soon as Discover knew that they were not able to do the loan due to an internal policy they should have stopped the process right away. The whole process was super deceptive and has caused me all sorts of stress. Had they told me right away I could have gone with an offer that I received from a different Financial Institution and could have been done with this whole process by now. I now have to start the process all over and my credit is going to take a major hit again as I am no longer in my window where new credit inquiries will not have an affect on my score. This loan not closing has also cost me {$10000.00} as I am missing an investment that I now have to back out of. I am very disappointed in this whole process and the lack of full disclosure and the overall deceptive nature of the whole process.

Company response to consumer: Closed with non-monetary relief