Consumer complaint received 2019-12-03
Company: GATEWAY FIRST BANK
State: OR
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
We have a XXXX XXXX XXXX Loan  through Gateway First Bank ( aka Gateway Mortgage ). We have currently completed all renovations as planned and stated in the loan documentation. However, Gateway is trying to force us to complete renovations that were never included in the loan plans & specifications and would cost us $ 10-20K out of pocket. 

We discovered that this is because of an appraiser error in the initial Subject To appraisal, which was supposed to be an estimate of the homes value after the specified renovations are done. The error at hand ( one of many, see below ), is that the appraiser incorrectly stated the house would be a completed 2.5 bath. However, a master bathroom full renovation at no point was ever to be included in the valuation, nor was a master bathroom full renovation planned in our loan at all. At the time of appraisal it was a 2 bath, and still currently is, as was the initial plan. The renovations were very clearly laid out in our loan documents, and were also attached directly in the appraisal, resulting in conflicting details within the appraisal documents. 

Gateway and the appraiser ( from XXXX XXXX XXXX XXXX   XXXX, WA ) have both refused to correct their errors in our appraisal. We are at a loss of what to do here, as we have fulfilled our contractual obligations for the renovations we agreed upon. It is wrong that they are forcing us to do more renovations because of errors that were not our doing nor our responsibility to correct. 

We have been going back and forth with Gateway for over a month with no resolution. We are now hiring a lawyer and filing formal complaints. Because of Gateways unwillingness to fix their own errors, we are unable to refinance. This is costing us thousands in the high interest rate they have us in, and their required PMI. 

For more context, here are all theerrorsin the initial appraisal packet from XX/XX/2018 : * Inconsistent/incorrect information throughout XX/XX/2018 appraisal, despite being given all plans and specifications of renovation items : * Listed as 4 bedroom ( is only 3 bedroom ) * Listed as 2 bath ( was at that time, and currently still is 2 bath ) * States, Additional features will include new ( er ) exterior paint, tile flooring, vanities, toilets, fixtures. None of these items werelisted in our loan plans and specifications at all. 
* Incorrect materials listed, stated as Additional features will include new ( er ) vinyl windowscomposition shingle roof, granite slab countertops, tile backsplash. Appraisal wasnotassessed using the plans and specifications. Higher quality materials were listed in plans and installed, thus increasing the value. These items were : 1. Metal lifetime roof ( vs. composite roof ) 2.  Metal insulated windows ( vs vinyl ) 3. Custom designer soapstone countertops ( vs granite ) 4. Custom designer soapstone slab backsplash ( vs tile backsplash ) * Renovation plans and specifications weredirectlylisted out in the appraisal documents, thus it should be concluded that the appraisal should be considered for the correct items it was supposed to be accounting for, no more no less. 
* XXXX XXXX XXXX loan website directly states that in regards to the renovation plans, These plans and specifications also must be used by the appraiserfor assessing the value. This clearly did not happen, nor did Gateway correct the errors. 

In addition to the + $ 100K of loan improvements in the property, we have spent over $ 34,000in improvements outside the loan to increase the value inmanyother areas. We've spent over 800 hours of unpaid labor on the house, for which would have been well over $ 30,000to have this work done by contractors.Documentation has been provided to Gateway & appraiser,  and we can provide all receipts and comparison bids upon request. 

We have documentation of comparison properties that are similar to ours, or without any renovation, and the average value isfarabove $ 500K.

Company response to consumer: Closed with explanation