Consumer complaint received 2022-08-16
Company: Home American Mortgage Corp
State: CO
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
We are refusing to accept this shady Loan approval practices : We all know that loan approval is based on, among other things, debt to income ratio. I truly appreciate the fact that " Homeamerica Mortgage Company '' made it super easy for us to qualify for the mortgage loan that we actually believed that were not going to qualify for the new loan with the current unusual interest rate hike in short time. We believed so because the interest rate had doubled in an unusual way which pushed us out of the market to buy this unit.

Here are some numbers for comparison purposes. The numbers are taken from the first loan estimate and the final loan estimate : First loan estimate ( principal plus intrest= {$2500.00} ) before interest rate hike Final loan estimate ( Principal plus intrest= {$3600.00} ) after rate hike In another words my annual mortgage payment in the first loan estimate amounted to be about {$40000.00} where as in the case of the final loan estimate the annual payment skyrocketed to an amount close to {$54000.00} Coming back to the debt/income ratio ( 26-38 ) %, a person with annual mortgage payment close to {$54000.00} needs to have a corresponding income of ( {$200000.00} - {$150000.00} ) Based on my most recent tax documents ( XXXX ), my wife 's income shows {$50000.00} and mine shows {$59000.00}. One can see these numbers from the attached XXXX tax return document. Prior years tax documents show a much lower income than XXXX. 

My question here is what are the basis for the approval of this extremely risky loan when the clients are willing to exit the contract because of their strong conviction that they will not afford to pay the loan in the long term? 

Some one may ask, why did I lock up the interest rate at 5.5 %? We locked it up because we believed that it was part of the mortgage process. We assumed that the system would recognize and automatically reject our application. That would have resulted for the clients to receive at least their earnest money without being penalized. However, because the builder and the lender are working in harmony, they did not care much about the risky qualification steps ; instead they kept pushing forward for the final approval and closing the loan on XX/XX/XXXX. 

Another point to look at this case is, the builder believes the newly built home worth much higher ( {$780000.00} ) than what we signed for ( {$710000.00} ). If that is the case then why do they need to keep the earnest money of a client who got pushed out of the market without their own fault?

We are not interested to accept this loan offer for the following two reasons : 1. The inflated home price in addition to the unexpected mortgage rate hike has priced out clients like us and this is not our fault.

2. The home appraisal and mortgage approval process does not reflect the reality on ground and needs to be scrutinized as to why the bank is allowing more risky loans even when the client says no to it./? 

Best Regards. 
XXXX

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation