Consumer complaint received 2023-03-29
Company: KILOWATT FINANCIAL, LLC, A SPRUCE FINANCE COMPANY
State: CA
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Closing on a mortgage

Complaint:
We are under contract to purchase a property that has a solar system leased through Spruce and need Spruce Power to provide recordable release documents so we can close the transaction. Spruce provided an email to us and the seller with the specific steps to follow and information that we needed to provide to process the lease transfer and lien release, as we all a timeline of how long the process would take once all information was submitted, which was 8-12 days. 

They also offered the ability to expedite the process for a fee of egregious amounts. To completed the process in 5-7 days, the fee is equal to 6 months of lease payments. To expedite to 1 day, the fee is equal to almost 27 months of lease payments. 

Spruce then proceeded to request additional payments, including a {$550.00} transfer fee and prepaid shipping labels, and to add additional undisclosed steps to the process that pushed the timeline beyond their initial estimate. For example, they stated clearly in the initial communication that the 8-12 day " clock '' would start once all information was received, but then did not officially start the " clock '' on their end until they processed the {$550.00} payment a full 4 days after we submitted the information. This delay is going to force us to move our closing date, which will result in excess mortgage interest charges between when our loan is funded and when we close, and additional expense incurred by us to change our moving plans. The only way to avoid this and close on time is to pay the aforementioned expedite fee. 

Additionally, they are have been wholly unresponsive. We tried to contact them 2 days before closing to confirm that they had all of the information they needed, but after over 7 hours on hold they never answered. When I was able to get a hold of them the day before closing, the representative could not help, refused to transfer me to a supervisor because they claimed they could not get a hold of anyone, and only offered to have a supervisor call me back on a timeline that would be after our scheduled close, or at best before close but not nearly soon enough to close on time. After I refused and demanded to speak to someone who could resolve the issue, they hung up on me. 

It is crystal clear that the whole process is designed to force consumers to pay additional fees to the company that are not actually avoidable without additional hardship on consumers. We spoke with them on the phone multiple times throughout the process and each time they make clear that they can finish in time for us to close if we pay a fee, and if not, they will not commit to any closing date. They are using their position of power in that they can delay closing to abuse consumers and extort additional, egregiously high fees from both the seller and buyer in the transaction. This is not a one off interaction, but an intentionally designed process that is unfair and abusive to consumers. In addition to repaying all of the costs that we will incur for this, they should be fined and forced to change their practices.

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