Consumer complaint received 2021-03-24
Company: AMERICAN FINANCING CORPORATION
State: CO
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
Six weeks ago ( beginning of XX/XX/2021 ), we contacted several lenders to get refinance offers. We received four of them with identical interest rate quotes. Three of the four had closing costs and monthly payments that were very close to each other as well. However, we wanted to support the local lender, even though their closing costs were not the lowest, so we went with American Financing. 

Both my wifes and my credit scores are over XXXX. My income is more than adequate to cover the loan. Loan to value for the home would be about 65 %. When American Financing requested documents, we always provided them within 24 hours of the request. In short, everything appeared to be going well until a week ago. 

A loan processor contacted me two weeks ago and let me know we would be closing on the loan this week ( XX/XX/2021 ). Late last week, I got a call from a loan consultant, letting me know that, since we applied for the loan and they supplied the loan estimate and closing cost worksheet, interest rates had risen, and they could no longer offer us the loan at the rate they quoted us. They wanted to charge me XXXX of a point higher than what they had quoted. 

When speaking with most of the lenders the very first time, they specifically asked us if we wanted to lock our rate at what they were quoting us. We always said yes. This has been standard procedure for all of the six mortgages Ive had in my life over the last 30+ years, and the rates were always locked, regardless of what happened to market interest rates. Im now being told by American Financing that, because of COVID, they stopped locking rates until the loan was approved by underwriting. 

It was no secret that rates were increasing when we applied for the loan. Thats the whole point in locking the rate. But instead of honoring the rate that they quoted us the quote that convinced us to go with American Financing theyve now decided that their bottom line is more important. Sure, rates went up during the five weeks it took them to approve the loan. But that delay had NOTHING to do with us ; as I said, we always provided what they requested within 24 hours. 

Heres the bottom line : American Financing saw that rates were rising, and they didnt want to get stuck with a loan at a lower rate. So they took their time through the underwriting process until the rates were closer to what they wanted to charge. Then they ignored the rate they quoted us so that they could make more money, regardless of the effect it had on me, the borrower. So while Im waiting more time than other lenders had promised ( some as little as 2-4 weeks ) again, thinking, Its okay ; Im supporting local business American Financing is taking their time so they can raise my rate and not honor the document on which I made my decision. So it looks like we may have to start all over again, and we likely wont get the same rate we would have if we had gone with another lender to start with.

Company response to consumer: Closed with explanation