Consumer complaint received 2021-12-26
Company: GUARANTEED RATE INC.
State: CA
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
Our mortgage refinance application in XX/XX/XXXX was approved by two other lenders but the XXXX division of Guaranteed Rate Inc. denied our application after selectively manipulating our income numbers to reduce our qualifying income. XXXX  was not able to justify the manipulations and we are left to wonder if XXXX discrimination was the reason for the denial. 
We were well qualified, having excellent credit scores of XXXX and XXXX, never having a late payment in 20 years of prior mortgages or any other loans, and having a loan to value ratio of less than 45 %. Our income comes from an XXXX we own that has been in business for over 10 years. Our debt to income ratio was more than adequate and was accepted by the two other lenders. 
XXXX took the business financial data from the Federal 1120-S tax return and selectively excluded some income from their calculations while keeping related expenses in order to deny our loan. One minor example was an expense for a licensing exam which was paid, but then refunded when the exam was cancelled. XXXX counted the exam fee, but insisted that the refund for the cancelled exam be excluded from their calculations. 
Other examples : 1. One owner of the XXXX XXXX as the Medical Director of an addiction treatment center. The medical director position continues in XXXX and is expected to continue in future years. XXXX declared it non-recurring income on the 1120-S and excluded it from their income calculations. When asked, they refused to submit an employment verification form to the treatment center, or examine checks or bank records, or consider any other evidence that the medical director position was permanent. 
2. The XXXX has insurance that covers legal expenses. In XXXX there were approximately {$15000.00} of legal expenses, and a corresponding {$15000.00} of insurance reimbursement. XXXX insisted over and over that the legal expenses must against the business, while the corresponding insurance reimbursements for these expenses must be excluded. They said that since they were ignoring the insurance reimbursements they could deny our loan due to insufficient income. 
We refused give up when XXXX kept rejecting the loan application and telling us their decision was final. We repeatedly challenged them to provide justifications. They claimed they were justified by XXXX XXXX  guidelines regarding income from self-employment. We studied these XXXX XXXX guidelines in depth and sent them highlighted copies showing their exclusions were not justified by the guidelines. This took a tremendous amount of our time, dozens of emails and many recorded phone calls over many weeks. We went well beyond the effort and knowledge that could be expected from all but the most stubborn and best educated borrowers. Finally, XXXX  said that they could approve the loan, but then asked us to sign a loan application saying the XXXX XXXX no income in XXXX, which was not true and could not have led to the loan being funded. 
We accepted a mortgage from another lender and gave up on XXXX However, we feel it is important that other borrowers not be treated the way we were. Our last name is obviously XXXX, and this took place at the same time as the surge in physical assaults on XXXX  in this country. Absent other explanations, we wonder if that could have been the reason XXXX repeatedly denied our loan application. At the very least, XXXX selectively manipulated financial data from our business tax return to deny our application in a way that was not consistent with accounting principles, nor with XXXX XXXX guidelines, nor with the practices of other lenders. If XXXX can deny loans by manipulating financial data without justification, what is to prevent them from practicing lending discrimination?

Company response to consumer: Closed with explanation