Consumer complaint received 2021-12-16
Company: LAKEVIEW LOAN SERVICING, LLC
State: OK
Product: Mortgage
Sub-product: VA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
REF : Lakeview LoanCare Loan # XXXX  XX/XX/XXXX To Whom it May Concern, My husband and I are both XXXX XXXX XXXX XXXX veterans who have been denied a VA refinance XXXX by Lakeview LoanCare due to our participation in the CARES Act Program of XXXX. 

In XX/XX/XXXX, we applied for and received a CARES ACT Forbearance due to the COVID-19 pandemic. The forbearance was for a period not to exceed one year. It began on XX/XX/XXXX and it ended on XX/XX/XXXX. 

In XXXX XXXX, I called Lakeview LoanCare and requested to have our account taken out of forbearance status. We received a letter in the mail offering us the opportunity to be placed in a temporary loan modification program with monthly payments and an interest rate that were much higher than what we had been paying. 

We again called Lakeview LoanCare and declined the loan modification, and asked if we could instead use our VA benefits to refinance the mortgage under the VA XXXX program at a lower interest rate, which we completely qualified for. 

We were told this was allowable, and we were transferred over to their Community Loan Servicing department that handles refinances, and assigned to XXXX XXXX XXXX. 

During the intake of information and the uploading of documents process, XXXX XXXX expressed concern that we might not be eligible to use our VA benefits because our loan was not seasoned according to VA requirements. 

I informed XXXX XXXX that our loan had indeed been seasoned for more than ten years, as it originated in XXXX and the VA seasoning period requires 6 months of consecutive on-time payments prior to closing on a subsequent VA loan XXXX which we had more than accomplished after 11 years of on-time payments. I provided XXXX XXXX with a copy of VA Circular VA Circular 26-20-25 that states as requirement for Cares Act Refinances : ( 1 ) The borrower has made at least six consecutive monthly payments on the loan being refinanced. For example, in a case where a borrower made five consecutive payments before invoking a CARES Act forbearance, such borrower would need to make six additional consecutive payments, post forbearance, in order to meet the seasoning requirement. 

Again, we had already made 11 years worth of consecutive payments before invoking a CARES Act Forbearance, thus our loan was completely seasoned. The VA confirmed this. 

In XXXX of XXXX our VA XXXX refinance loan was denied by Lakeview LoanCare. By this time we had made 3 consecutive on-time payments since the forbearance period ended on XX/XX/XXXX. Payments were made in XXXX, XXXX, and XXXX. 

Included in our denial letter was a snippet containing the exact same verbiage taken from VA Circular 26-20-25, which is the circular we had provided to XXXX XXXX XXXX at the very beginning of the process. The snippet provided in the denial and used to justify our denial read : ( 1 ) The borrower has made at least six consecutive monthly payments on the loan being refinanced. For example, in a case where a borrower made five consecutive payments before invoking a CARES Act forbearance, such borrower would need to make six additional consecutive payments, post forbearance, in order to meet the seasoning requirement. 

When we pointed out that this was the exact same snippet that the VA provided as a protection for veterans who had invoked CARES Act forbearances, and who were not to be denied the right to use their duly earned VA benefits, we were then told that Lakeview LoanCare has its own internal seasoning requirements that they were using to deny us an XXXX, and that we needed to make six monthly payments before we could proceed with our refinancing. 

A few days later we received an email attachment dated XX/XX/XXXX stating that our loan was denied not because we needed six monthly payments as we had clearly been told in writing and provided a snippet to support, but now the reason stated for the denial was because we were still in forbearance status. 

This was a completely impossible excuse as the forbearance period lasted for only one year, and it had already expired three months earlier on XX/XX/XXXX, which I provided the letter generated by Lakeview LoanCare to verify. The entire reason we were attempting to refinance was because the forbearance period had expired after one year, and they offered us a very expensive loan modification at its end. 

We believe the refinance denial from XXXX XXXX XXXX was a discriminatory " punishment '' levied against military veterans who hold fully seasoned VA loans, and who have gone on years after such seasoning to invoke a CARES Act forbearance. 

We further believe XXXX XXXX XXXXLakeview LoanCare sought to deny us the right to utilize our VA loan XXXX whose interest rate was far lower than the interest rate offered under their loan modification program, as a means to force us to pay a much higher monthly mortgage and to generate as much income for the financial institution as possible. They are continuing to deny us as veterans the right to use our VA loan benefits in direct opposition to the VA 's position that, " lenders should not use a CARES ACT forbearance as a reason to deny a Veteran a VA-guaranteed loan. '' VA XXXX XXXX states as follows : 5. VA-guaranteed Purchase and Cash-out Refinance Loans. Veterans who are affected by COVID-19 should still be afforded the opportunity to utilize their earned VA home loan benefits. For this reason, VA is temporarily relaxing certain credit underwriting policies for VA-guaranteed purchase and cash-out refinance loans. While lenders must continue to follow VAs underwriting standards generally, lenders should not use a CARES Act forbearance as a reason to deny a Veteran a VA-guaranteed loan. In such cases, borrowers, through the lender, must provide reasons for the loan deficiency and information to establish that the cause of the delinquency has been corrected. See 38 C.F.R. 36.4340, 36.4306 ; VA Pamphlet 26-7 ; and VA Circulars 26-20-10 , Lender Guidance for Borrowers Affected by COVID-19, 26-20-19, Additional Lender Guidance Concerning COVID-19, and VA Circular 26-20-13, Valuation Practices during COVID-19, including future policy updates that would supersede Circulars listed above. VA will not consider a Veteran as an unsatisfactory credit risk, based solely upon the fact that the Veteran received some type of credit forbearance or experienced some type of deferred payment during the COVID-19 national emergency. VA reminds lenders instead to continue to review and evaluate all applicable credit qualifying information, e.g., residual income, debt-toincome ratios, credit, and assets. Although deferred payments may not be considered for credit risk purposes, the lender should consider the monthly obligation if the debt remains active after closing the new loan. 

By the time we applied for the VA XXXX refinance in XX/XX/XXXX, our COVID financial situation was completely resolved, wed met and exceeded all financial qualifications for the loan, and our credit scores were both over 800. There was no valid or legal reason to deny us this loan. 

We were contacted by a compliance rep named XXXX XXXX, who reviewed our case. 
XXXX XXXX did some investigating, and after several weeks called us to say that she was unable to assist us because Lakeview LoanCare had its own seasoning requirements that outweighed the VAs requirements. XXXX XXXX informed us that we would have to make 6 consecutive payments AFTER the forbearance period in order to apply for a VA XXXX loan. 

We also received an email letter from the Compliance Director, XXXX XXXX, who further explained that our loan was being denied because we needed to have six monthly payments after the forbearance period ended. 

We complied with this requirement and made payments in XXXX, XXXX, XXXX, XXXX, XXXX and XXXX. Each time we made a payment we called in to the payment processing center and asked how much we needed to pay, then we dutifully paid that amount. 

After our 6th consecutive payment was made in XX/XX/XXXX, we contacted XXXX XXXX XXXX and reapplied for a refinance of our property using our VA XXXX benefits. We again went through XXXX XXXX XXXX, who led us to processor XXXX XXXX XXXX, and we submitted all required documentation. However, we ran into another roadblock when we were told by XXXX XXXX XXXX that our loan was still in modification status, which it should have never been in modification status because we never signed any paperwork to modify since we were seeking to refinance. 

In fact, I spoke to two Lakeview reps who asked me about the loan modification documents and I informed them that we were in the process of refinancing the loan, and were following the instructions to make 6 monthly payments as required as per the compliance director. I asked that this be annotated in our records so it would be clear that we were pursuing a VA XXXX refinance. 

Remember, we were told by Lakeview that 1. We could refinance in lieu of modification at a higher interest rate. 
2. We needed to make 6 monthly payments after forbearance 3. Now, we were being denied again because they claimed we were in a modification status. 

A couple of weeks ago I called Lakeview LoanCare to initiate a telephone payment as I usually do each month. I was told that no payment could be accepted because the account was in a breach status and there was no one who could elevate me to a supervisor. 

I contacted XXXX XXXX from compliance seeking assistance. She reached out to a resolution team that is supposed to handle these matters, yet each time I called her for an update she had to regretfully inform me that no one from that team had responded to her numerous calls and messages. It was shocking and sad to find that although she wanted to help resolve this situation, there was absolutely nothing she could do to assist me. It was obvious that she was being ignored by those who were placed in the position to help, but who were instead completely unresponsive to their customers. 

We have truly gotten the run around from this company at every juncture, we've had them tell us one thing and days later tell us something else, and we have been subjected to completely unresponsive personnel at every single level of the company. 

We are requesting that you investigate this denial of a legitimate and fully qualified VA XXXX, and assist us in obtaining the refinance loan that our service and sacrifices deem us entitled to. 

Thank you. 

XXXX. 
XXXX, XXXX XXXX XXXX. 
XXXX, XXXX XXXX

Company response to consumer: Closed with explanation