Consumer complaint received 2022-08-18
Company: HFS Financial LLC
State: CA
Product: Payday loan, title loan, or personal loan
Sub-product: Installment loan
Issue: Getting the loan

Complaint:
XX/XX/XXXX To Whom It May Concern : I was directed to HFS Financial by a XXXX. I just purchased a new home XX/XX/XXXX and had a small window to schedule and complete a fair amount of work. I was repainting the entire home, installing XXXX square feet worth of new flooring, landscaping the yard ( including some demo, install of pavers and patio cover, shrubs, and new grass and irrigation system ), a new XXXX XXXX XXXX and new appliances for the home Washer/Dryer, Refrigerator, Stove, Microwave and Dishwasher. I originally contacted HFS financial on XX/XX/XXXX and spoke with XXXX XXXX ( Senior Loan Consultant ), following my application I was shifted to XXXX XXXX ( Processor ). They mentioned that I was conditionally approved for an {$80000.00} loan, and it would take two weeks to get through the paperwork. I said that I needed to pay for items to secure their scheduling. For example, my flooring was installed by XXXX XXXX and they will not schedule until you have paid the job in full. I advised both XXXX and XXXX of this. They told me its ok, because the deposit would come to me and I could use the funds however I wanted after I received them. Being already pre-approved, they had already received all of my receipts ( and spoken to the contractors by phone ), and they pulled my credit, I figured we would be closing in a couple of days. Over the next couple of weeks the items that I advanced paid for with my credit cards have posted to my credit report. On XX/XX/XXXX I received an email from XXXX XXXX that the bank has now said they will only approve {$35000.00} ( rather than {$80000.00} ) because of the debt that has posted to my credit report. This was upsetting, because they fully understood that the new 20 year loan would pay off the other debt. Then, XXXX than a week later on XXXX, XXXX XXXX emailed me again and said they determinized that my debt to income was too high and they couldnt approve me for any loan. 
My complaint is that I was deceived. Both XXXX and XXXX had no problem with me advance funding the work that I wanted to complete and using the loan proceeds to pay these off. They emphasized that the proceeds would come to me, and I could use them to do anything. I went back to both of them after the loan was decreased to only {$35000.00} and said did you explain that the debt on my credit report is from the home improvement? I also said cant we pay off these accounts at closing. They said no. 
You will be pleased to know that I contacted XXXX today XX/XX/XXXX and wanted to find out if there was any misunderstanding. He said no and said the only reason the loan was denied was because of the increased debt on your credit report. I proceeded to tell him that I was honest with HFS and told them everything, even uploaded receipts for the purchases. I followed their guidance to pay for the items in advance and use the loan proceeds to pay them off. If I was warned once that if these show on the credit report the loan will not go through, I would have waited a couple of weeks. However, that was not the case at all. Actually, XXXX said he can not payoff dept or tell the banks that this will be used for debt because he is selling home improvement loans and not debt consolidation loans. That being said, they sold me something that they are not licensed or have the ability to sell. The entire outline of my loan and HFS advising me to advance pay for items and upload receipts, then pay off my debts with the loan proceeds is indeed dept consolidation. Yet, they tell me they are not able to sell these. So they were marketing and advising me on a product they can not offer. Additionally, my receipts and situation was never shared to with the bank. They defrauded the banks they work with to complete a loan. They wanted it to appear as no work had been paid for and nothing had started. Because they are only authorized to complete home improvement loans. 
I think the above is a result of deception, lack of experience, lack of professionalism, and more. The only reason my loan was not approved is because of the debt that the bank was 100 % aware of and they approved. 
I want others to be aware of their practices, so they do not make the same mistakes that I did. My monthly payments are now higher on credit cards, and with higher interest rates as a result. I think this needs to be further investigated and I would be happy to supply any and all correspondence I have had with HFS on the aforementioned topic.

Company response to consumer: Closed with explanation