Consumer complaint received 2021-01-19
Company: TRUIST FINANCIAL CORPORATION
State: KY
Product: Mortgage
Sub-product: FHA mortgage
Issue: Closing on a mortgage

Complaint:
https : //complaint.consumerfinance.gov/submit-a-complaint/s/ I am a single mother who has been saving for many years to buy my first home in order to provide a stable environment to raise my son. I applied to Truist ( Now BB & T ) and was preapproved for a loan. I was finally able to find a house that I could afford, and on XX/XX/2020 I was excited to sign an agreement to purchase a home in XXXX, KY. The agreed-upon closing date was XX/XX/2020. After signing the purchase and sale agreement I contacted my loan officer and provided updated documentation of income and assets, along with a check for {$500.00} for the appraisal fee. The loan was in process and I provided all of the needed documentation to complete the loan. It wasnt until the last minute and weeks after already extending the closing date because the loan officer realized that I couldnt use a chip loan for this home, in the beginning I did make sure it would be ok before going they with this property and she reassured me that it would qualify, they then had to start over with an FHA loan. After being told another closing date of XX/XX/XXXX, and waiting a whole month again, the week of closing I was told that there was a problem, and that FHA required that the seller own the property for at least 90 days before it could be re-sold and financed FHA, and that I would have to sign a new purchase and sale agreement after 90 days and then the loan couldnt close for 30 days after that. After the 90 days, as we were getting ready to re-sign the agreement, I was told that FHA would require a second appraisal. At this point, the seller backed out, and I not only lost the house, but adding insult to injury, I lost my {$500.00} appraisal fee. 

After researching the situation, I learned that this is a fundamental requirement of FHA that the bank should have been aware of from the beginning. The preliminary title report would have disclosed this information and the bank should have notified me before ordering the appraisal. Furthermore, they should have known that a second appraisal would probably be required so that we could prepare my seller for that likelihood. I am very upset at the way this situation was handled, and they were very unprofessional about the situation, I did contact the branch manager   XXXX and left several voicemails and have waited and given plenty of time for him to contact me back, but he has not returned any of my calls. He did reassure me towards the end that everything was going to be ok and I wont loose the house. I feel like they did not do there job to help me like he said he would, he and the loan officer were very unprofessional! 

for that likelihood : FHA prohibits FHA financing on properties that were acquired by the seller within the previous 90 days, in order to prevent " property flipping. '' ( " Property flipping '' happens when a recently acquired property is resold for a considerable profit with an artificially inflated value. ) FHA will not insure a mortgage if the sales contract for the purchase of the property that secures the mortgage is executed within 90 days of the prior acquisition by the seller, and the seller does not come under any of the exemptions to this 90-day period specified below. 
The following guidelines apply : It is acceptable to re-execute the purchase and sales agreement to meet the 90-day rule. A copy of the re-executed purchase and sales agreement at day 91 or later must be included in the file. If this is not in the file at Underwriting, it must be listed as a U condition. 
The appraisal does not need to be re-ordered or corrected to reflect the updated purchase and sales agreement and a new case number does not need to be requested. 
The Conditional Commitment and the final approval docs must be dated after the re-executed purchase and sales agreement. 

For resales that occur between 91 and 180 days : Obtain a second FHA appraisal by another FHA Appraiser if : the resale date of a Property is between 91 and 180 Days following the acquisition of the Property by the seller ; and the resale price is 100 percent or more over the price paid by the seller to acquire the Property. 

If the second appraisal supports a value of the Property that is more than 5 percent lower than the value of the first appraisal, the lower value must be used as the Property Value in determining the Adjusted Value. 
The cost of the second appraisal may not be charged to the Borrower. 

I believe that Truist should have informed me and the sellers about this requirement in the early stages of the loan. Their incompetence caused me to lose the home. I feel that they should refund my appraisal fee and report fee in return so I can continue on my search. 

Thank you, XXXX XXXX XXXX XXXX XXXX XXXX

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