Consumer complaint received 2015-08-09
Company: REGIONS FINANCIAL CORPORATION
State: FL
Product: Mortgage
Sub-product: Conventional adjustable mortgage (ARM)
Issue: Application, originator, mortgage broker

Complaint:
Regions Bank holds the mortgage on my home. I applied to Regions Bank for a refinance loan. Regions put in in touch with a loan officer, XXXX XXXX XXXX. In my initial conversation, I disclosed to him which loan I wanted and our financial circumstances. Based upon this, Regions knew or had reason to know that I could not qualify under the requirements of the loan which I sought. This is the case despite the fact that we have excellent credit and financial resources. Today, over 90 % of loans are sold to XXXX XXXX or XXXX immediately after securitization. These two XXXX then issue securities guaranteed by the full faith and credit of the XXXX, either through securitization or as covered bonds. We fail to meet the income and debt ratios for the loan under XXXX XXXX XXXX guidelines. 
In this case, Regions was only prepared to make a loan conforming to these guidelines. I was informed of none of this. Instead of informing me of this by " prequalifying '' me for the loan based upon my verbal representations in relationship to the guidelines, Regions issued a full loan disclosure document. XXXX XXXX then asked me to submit detailed financial documentation to substantiate my representations which I did. Subsequently XXXX XXXX requested me to submit additional documents and had me increase the monthly distribution paid from our trusts and documentation confirming that this amount had been paid into our Regions ' checking account. The entire process took more than XXXX months and a significant amount of my time. 

Even at this point, no one bothered to inform me that based upon the documentation submitted I did not meet the underwriting requirements for the loan. Instead, I was asked to pay {$400.00}. for an appraisal to secure a loan that would never be made. Only after payment was made was the documentation submitted for a review by an underwriter who belatedly started the process leading to my being informed that I did not qualify. In short, Regions wrongfully caused me to spend {$400.00}. when either they knew or should have known that the loan would never be made. 
This is a wrongful consumer abuse. Apparently, the procedure described above enables Regions to make more loans with a lower overhead. Most banks have licensed mortgage brokers taking applications who will inform a customer right away if the customer fails to qualify for the loan under its specific underwriting requirements. I do not believe that the consumer should be stuck with the bill because Regions has changed the way this type of transaction is customarily handled without first disclosing this to the customer. Regions, at a minimum, should either conform its procedure to the customary way other lenders take loan applications or make prior written disclosure to a loan applicant that fees will be collected without prior prequalification of the customer.

Company public response: Company chooses not to provide a public response
Company response to consumer: Closed with explanation