Consumer complaint received 2022-03-28
Company: PENTAGON FEDERAL CREDIT UNION
State: PA
Product: Mortgage
Sub-product: VA mortgage
Issue: Closing on a mortgage

Complaint:
A VA Refinance & Cash Out loan application was initiated XX/XX/XXXX with PenFed Credit Union. Closing date was set for XX/XX/XXXX. 

The degrees of professional negligence ranges from failure to exercise due diligence, communicate in a time manner, blatant lack of transparency, and/or absolute ignorance of very basic Veteran Administration processes and procedures. 

After locking in a 2.25 % interest rate almost immediately, I was requested to provide all of the basic supporting personal and financial documentation which I provided within days. I began to be pressed by their staff to virtually sign documentation through their portal by XX/XX/XXXX on loan estimate documentation, yet I had not yet been contacted by the appraiser. When I telephoned the loan processor on the XXXX, after getting no valid response to my emails, she informed me that the system showed that the appraisal was already done, but yet she didn't see the report. Later that day, I get a call from the appraiser requesting a rushed appraisal the next day. I begrudging agreed due to the short notice and suspicion. 

After the appraiser and her son assistant, who was wholly unprepared, finished their appraisal, she submitted a report that same afternoon to the bank. The report noted that minor damage to one of the patio support beams required repair prior to closing and gave an appraisal value that was MINIMALLY 45 % under market value with comparables that were significantly smaller than my house, property site, and overall features. Additionally, the appraisal value came in less than the principal ( and HELOC ) balances of the home, not to mention, less than what I purchased it for 5 years prior. Yet, somehow, PenFed still pressed me to sign the loan estimate forms. 

After finally reaching a live person and pointing out the obvious impossibility of the documentation, I asked about my options and was advised that my only option was to go with a conventional load. I pressed them to request a Veterans Administration Reconsideration of Value. The representative did not know how to do this and once I was finally provided with a form, it did not ask for relevantly information that the VA would consider substantial. I filled out the form and submitted it, but decided to contact the VA directly, research my own comparables/formatting, and submit my own Reconsideration of Value directly to the VA. Thankfully , I did. 

After getting my US Congressman 's office involved, I was able to have the VA properly re-evaluate the original appraisal at which time they acknowledged my claim that the original appraiser did not exercise the very basic standards and mandates of the VA Pamphlet that provided guidance for appraisals. The VA recognized that not only was there a substantial pricing error ( that was not in my favor ), but that the three primary comparable homes were not indeed comparable to my home. My appraisal value was increased, however, still not remotely near market. I therefore invited to submit a new set of comparables, which I accepted, are they presently being evaluated again. Lastly, the VA rep stated that they would allow the appraiser 's {$1000.00} estimated repair to be performed after closing, provided the bank agreed to escrow {$1000.00} of the cash out amount until repairs are made. 

In the meantime, I was attempting to update and engage in regular email and/or telephone communication with PenFed so as to keep the other requirements of my loan package on track for a closing date, but very rarely received a response, let alone a timely one. As my original closing date approached, I was reaching out to PenFed daily as to the need to update the Loan Estimate forms to reflect the new appraisal values and establish a new closing date. Also, I needed them to request a Waiver for the Repair mandate. I was told that was not necessary and that I could just sign the forms and they would update the costs later. I did not comply and pressed them to properly update these forms before I would sign. Additionally, I received unclear and/or conflicting information with regards to the procedures and cost to extend my 2.25 % interest rate option. After weeks of limited responses and informing them that I would file a formal complaint with relevant regulatory government agencies, I finally received an explanation that there were allegedly issues with a different department 's staffing that posted the Loan Estimate virtual documents. 

By XX/XX/XXXX, I received notice from PenFed that the Loan Estimate forms were finally updated to reflect the XX/XX/XXXX VA Reconsideration of Value appraisal increase to {XXXX}. However, upon immediate review, I found several problems. An astronomical locked extension option rate, glaring line item omission of the principal balance payoff, and no reference to the $ XXXX HELOC pay off. Additionally, the bottom line cash-out amount to me was shorted by at least {XXXX}! I attempted to bring this to PenFed 's attention through the usual means and, as usual, received delayed, cryptic, or no response. I still have no new closing date. Finally, on XX/XX/XXXX, I was able to directly contact the loan processor, who informed me that my lock loan rate extension was due to expire in 3 days ( XXXX. XXXX ) and that my loan status had been put on hold because they were still awaiting a response from VA as to the request for a waiver for the repairs. 

At this point, I ran out of patience. I inquired as to how my loan rate extension could expire when a new closing date was never established, why were they still waiting for a response on the repair waiver when I was already informed by the VA that they the estimated repair amount simply needed to be put in escrow, was the missing $ XXXX cash out amount error discovered, how come no one responded to my multiple inquiries over 3 weeks to update me on this hold status, and would I be responsible for additional costs to extend the loan 's locked rate again? The loan processor said that she would reach out to her superiors for answers and guidance. 

Two days later, I receive notice of yet another Loan Estimate update in the portal. While it put in a new closing date of XX/XX/XXXX, as expected there was still a discrepancy in the cash out balance ; which at this point should be even higher as I have had to continue to pay 2-3 additional months on the existing mortgage and HELOC accounts. I immediately, again, reached out to my loan processor and officer. As usual, I have yet to get a response.

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