Consumer complaint received 2016-12-08
Company: CAPITAL ONE FINANCIAL CORPORATION
State: CT
Product: Mortgage
Sub-product: Conventional adjustable mortgage (ARM)
Issue: Loan servicing, payments, escrow account

Complaint:
XX/XX/XXXX in the height of the financial crisis I rang my mortgage bank, ING mortgage, and asked about refinancing. I was told by phone that if I could lower the principle below {$500000.00} ( from {$650000.00} ) I would be able to significantly lower my interest rate. I was on a XXXX ARM at 5.25 % and I was told the rate would go to 3.875 % for another 5 year lock provided I pay a fee equivalent to one month 's mortgage payment at the 5.25 % / higher rate. 
I was told the remaining term & terms of the loan would stay the same. 
Critically the rate renewal process was done online, by simply checking a box and then speaking to an agent. Forms were then sent out just before new year as the final part of the process to confirm what had been discussed. 
Please see pages XXXX & XXXX of the XX/XX/XXXX mortgage documents I am sending you. 
The page titled " Agreement to modify note '' was, I was told, to lower my rate for 5 more years. It was not pointed out or even discussed that the index that is used for future rate changes after the ARM expires was also changed. 
The original mortgage stated the index used was " the weekly average yield on US treasury securities adjusted to a constant maturity of 1 year, as made available by the Federal Reserve Board. '' ( see XXXX of the pdf ). 
The agreement to modify cites a different current rate of " the One Year treasury bond ( XXXX ) '' changed to " the one year LIBOR ''. 
One year Libor is a much higher rate than the weekly average yield on US treasury securities adjusted to a constant maturity of 1 year. I am led to believe by over XXXX higher. This will significantly raise my mortgage payments as my 5 year ARM expires this month. 
I refinanced the XX/XX/XXXX ARM again in XX/XX/XXXX. Again online with a one month mortgage payment fee and with a similarly short modification note. This note only refers to " the index '' without stating which index. 
Conclusion : 1. I was misled in XX/XX/XXXX. It was never verbally discussed that the reference rate was changing. I paid significant fees with a large capital pay down to be stuck with a higher index rate. All the initial refinance processing is done online and by phone. The modification documents are only sent out once agreement is reached. 
2. the index rate in the XX/XX/XXXX " Agreement to modify '' is different from that stated in the original XX/XX/XXXX mortgage documents. 
XX/XX/XXXX documents state " the One Year treasury bond '' versus the original documents state, " the weekly average yield on US treasury securities adjusted to a constant maturity of 1 year, as made available by the Federal Reserve Board. '' 3. the XX/XX/XXXX agreement to modify does not highlight what was a major change to the index rate used for my loan. This issue is also coupled with the error in point 2. above. 
I will be paying a much higher floating rate starting XX/XX/XXXX, due to this misleading change to the index rate used for my mortgage.

Company response to consumer: Closed with explanation