Consumer complaint received 2015-05-22
Company: NFM, INC
State: MD
Product: Mortgage
Sub-product: Conventional fixed mortgage
Issue: Credit decision / Underwriting

Complaint:
My complaint is due to inappropriate and Unfair/Deceptive actions on the part of a Loan Officer with NFM Lending, in the processing of a mortgage application on which a purchase-sale agreement was predicated on. I was not the mortgage applicant in this case but I was as a party to this transaction and was harmed because of the actions of NFM 's Loan Officer, XXXX XXXX XXXX. The issue here is not the real estate transaction, which is not w/in CFPB 's juris., but NFM 's actions in the mortgage credit transaction. 
XXXX XXXX received an application for a mortgage from XXXX who were under contract to buy our home. An unexpected low appraisal valuation impacted the terms of the financing application with NFM. The Buyers ' contract did not include an appraisal contingency so they were obligated to settle unless they were unable to get financing. The Buyers ' agent, recognizing the difficulty due to the lack of contingency, proceeded to manipulate the loan application in an effort to release her clients from the contract. 
On XXXX/XXXX/15 we received an email from the Buyers ' agent informing us of a loan denial, she submitted a letter from NFM Lending as evidence, which indicated that the buyers were " short of verified funds for loan approval '', the letter was informal & suspicious. I asked our agent to request the official Adverse Action Notice which per XXXX requires NFM to identify specific denial reasons. Our agent reached out to NFM Lending and requested the Adv. Act. Notice from the underwriter. The NFM rep. indicated " [ that the buyers ] were nowhere near a denial ''. Due to a lack of agreement on a new sales price we received, on XXXX/XXXX/15, an email from the Buyers ' agent with the " Adverse Action Letter '', which was veritable & evidenced the denial. However, the Buyers already revealed in the contract that they had $ XXXX in the bank that would enable them to get a mortgage. The denial reason was inconsistent with this fact, since NFM was giving them 95 % LTV on a $ XXXX note. 
The agent inadvertently attached email traffic between herself and the NFM Loan Officer that revealed some serious concerns regarding unfairness/deception. The Buyers ' agent asked XXXX XXXX to provide her an " Adverse Action letter [ ... ] as soon as possible '' In response the Loan Officer asked for clarification : " Question. For the Adverse Action letter do you need a withdrawal or a denial or either? '' The agent responded that she preferred a denial which XXXX XXXX promptly provided. 
This exchange is concerning -- ECOA/Reg B requires NFM to deny the loan on the merit of underwriting. This process does not provide for external parties to render a decision on the application other than the underwriter, nor does it provide for external solicitation of a specific outcome. If this is the case, then NFM needed to also disclose the agents ' request for a denial as a contributing factor. I thought that ECOA facilitated fairness and discouraged discretion in approval/denial of a loan. I am disturbed that NFM uses discretion to approve/deny an app. & invites non-lending parties to decide if a loan is denied or withdrawn. 
Furthermore, in the haste to complete the service request XXXX transmitted the denial letter and included the applicants ' PII. XXXX XXXX 's actions were grossly inconsistent with Gramm-Leach-Bliley as he did not exercise caution and revealed the applicants ' credit scores to me, my husband and our agent as well as the Buyers ' agent. We reached out to NFM 's mgmt. to complain but to date have not received a response from them explaining XXXX XXXX 's irresponsible actions. I am concerned that NFM 's practices can negatively impact my own ability to obtain a mortgage or others like me if the decision to approve/deny a loan application is untrue and that discretionary opinions influence the treatment of applicants

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation