Consumer complaint received 2019-01-24
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: MA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
This complaint is being made with respect to Bank of America 's failure to honor a rate lock commitment, which I view as a potentially unfair and deceptive trade practice in context. On XX/XX/XXXX, my wife and I closed on a single-family home. During late XX/XX/XXXX and early XX/XX/XXXX, as mortgage rates were declining, I had several discussions with a lending officer ( " Lending Officer '' ) from a branch in Massachusetts regarding the refinancing of the new home. The Lending Officer was aware, based on previous discussions we had with him throughout calendar year XXXX, that we currently reside at a condominium until some renovations are completed on our new home. On a related note, we had also discussed with the Lending Officer taking a home equity loan on our condominium to finance the renovations ( we hold the condo mortgage with Bank of America, but not the single-family home mortgage ). The Lending Officer was aware that we intended to sell the condo once we move into the single-family home after renovations are completed and told us that Bank of America did not have a home equity line to offer us on our condo because " [ d ] oing a poke around our guidelines and it will be tough trying to establish the condo as a primary residence. '' On XX/XX/XXXX, with mortgage rates as favorable as they had been in several months, we locked in a 30 year fixed rate of 4.00 %, including lender credits of around {$5400.00}. Throughout the next two weeks, we diligently provided materials requested from the Lending Officer in connection with the loan. Note that during this time mortgage rates steadily increased. On XX/XX/XXXX, I received an e-mail from the Lending Officer as follows : " At this point we can not proceed with the loan as you are not residing in the property. While common sense and my conversations with you say you will, I have moved your situation up through various managers here and they can not offer an owner occupied rate on a property you are not residing in yet. My suggestion is this. Get your work in the home completed asap. Take the steps to change your banking profile to show [ name of street ] as your home address. Once the house is not empty, then we can proceed with a refinance. I'm available to speak about this anytime, but will be unavailable today XXXX-XXXX. '' Following this e-mail, I had a few discussions with the Lending Officer. I expressed my frustration that this denial was based on information that had already been disclosed prior to the rate lock commitment, particularly as the Lending Officer had told me that based on Bank of America 's guidelines it would be tough to establish our condo as our primary residence ( it would seem to follow that our new home should be classified under their policies as our primary residence, since one ought to have a primary residence ). It is also worth noting that I was not made aware that the rate was an " owner occupied rate '' at the time it was locked. 

I have several questions for Bank of America : - What Bank of America policy governs the decision as to whether or not a loan qualifies for an owner occupied rate? Did the Lending Officer fully comply with this policy in offering us the owner occupied rate on the new home?

- What are the conditions in such policy for qualifying for an owner occupied rate? For example, I am aware that some banks will honor an owner occupied rate if the borrow intends to move into the home within 30 or 60 days after closing, for example.

- How are lending officers trained on rate qualification policies? Does Bank of America think lending officers are adequately trained on such policies?

- Are there any exceptions to the rate qualification policy that can be made by a manager/supervisor ( e.g., if a lending officer incorrectly locks an owner occupied rate )? 

I have been struggling to determine the underlying motivation for Bank of America not to honor the rate lock commitment ( economic reasons, lack of reasonable policies/policies on quoting qualifying rates, poor training on such policies, etc ). If indeed our new home did not qualify for an owner occupied rate ( which is unclear to me given that we intend to live in the home within a relatively short period after the close of the loan ), it would seem to me that the Lending Officer should have recognized this prior to locking in our rate given that we had given him information on our living situation and the denial of our loan was not based on any new information given after the rate lock. It is critically important that bank lending officers who are locking in mortgage rates recognize facts given to them that would disqualify the borrower from otherwise qualifying for a rate, given that consumers suffer when loans are denied.

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