Consumer complaint received 2023-09-16
Company: CITIZENS FINANCIAL GROUP, INC.
State: NY
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process
Sub-issue: Lien release

Complaint:
Consumer Financial Protection Bureau XXXX XXXX XXXX XXXX, IA XXXX My name is XXXX XXXX XXXX XXXX MD and my wifes name is XXXX XXXX XXXX XXXX We live at XXXX XXXX XXXX, XXXX XXXX, New York XXXXXXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX 
These are our complaints against Citizens Bank XXXX Bank ) in connection with a construction loan ( in my name alone ), in the amount of {$870000.00}, regarding the construction of our custom home located in XXXX XXXX, New York. 
What we had thought would be a dream come true has become a nightmare in large part due to the bad faith and misconduct of the Bank. 
Our first complaint arises out of the Banks approval, following its own flawed construction progress inspections, of construction loan disbursements to our prior builder for construction work that was not actually performed and/or completed as claimed by the builder. 
The failure of the Bank to properly perform those progress inspections resulted in excess disbursements to the builder in an amount exceeding {$150000.00}. 
As result, we are now responsible to repay the funds that the builder received far in excess of what it was entitled, and we have had to rebuild portions of our home in order to meet the architectural plans and the towns inspection standards. 
The initial builder for our home was XXXX XXXX, XXXX and its owner is XXXX XXXX ( collectively XXXX XXXX ). We terminated XXXX XXXX on XX/XX/2023 for various reasons. 
At the time of their termination, XXXX XXXX had received {$550000.00} in total Citizens Bank construction loan disbursements, leaving only {$320000.00} in construction funds to complete our home. 
At that time, XXXX XXXX had received : {$28000.00} based on the false claim that 80 % of rough electrical work was complete ; {$27000.00} based on the false claim that 50 % of rough plumbing work was complete ; {$25000.00} based on the false claim that 100 % of HVAC work was complete ; {$14000.00} based on the false claim that 100 % of the exterior trim was finished according to the best quality standards ; {$18000.00} based on the false claim that 100 % of the framing was complete and was ready for the towns inspection ; and {$19000.00} for exterior doors and windows, which he refused to deliver. 
In addition to the Banks improper approvals of the construction loan disbursements to XXXX XXXX, it compounded our severe financial distress in connection with the construction of the home by refusing to authorize the final construction loan disbursement to our replacement builder due to the filing of a Mechanics Lien  by XXXX XXXX. 
This abuse of discretion is our second complaint against the Bank. 
We asked the Bank to reconsider its decision not to approve the final disbursement because the disbursement approval is consistent with the terms of our Mortgage. 
The Bank, however, would not reconsider its bad faith decision. 
The Mortgage provides that we are not required to promptly satisfy the Mechanics Lien to the extent we are defending the lien in good faith such that it may not be enforced until the lawsuit ends. See, Mortgage at page XXXX. 
As we advised the Bank, we have disputed the lien in the Supreme Court such that even if all, or some part of, the lien is enforced, which is unlikely given our claims against XXXX XXXX, it would not be enforced until the conclusion of that litigation. 
The Banks actions of withholding the final disbursement will severely prejudice us as we will not be able to complete construction of the home, which will prevent us from obtaining a Certificate of Occupancy so that my family can begin residing there. The dire financial consequences to our family can not be overstated. 
The Banks actions will result in us paying it a penalty in the amount of {$4300.00} every three months, due solely of the Banks improper refusal to release the final disbursement, while simultaneously benefiting the Bank financially as we also pay the Bank in excess of {$2600.00} each month in interest. 
We also understand the Bank issued several construction loans where the builder was XXXX XXXX, and that none of those custom homes were completed by XXXX XXXX 
XXXX. In fact, there are four other lawsuits pending in the Supreme Court involving XXXX XXXX or XXXX XXXX, XXXX with at least three other Mechanics Liens having been filed by our prior builder. 
We are simply asking that you investigate the Banks deception, lack of fair-dealing and abuse of discretion as it relates to their flawed inspections which resulted in the substantial overpayments to XXXX XXXX, and its wrongful decision not to authorize the final construction loan disbursement to our substitute builder.

Company response to consumer: Closed with explanation