Consumer complaint received 2015-08-07
Company: NETWORK CAPITAL FUNDING CORP
State: MD
Product: Mortgage
Sub-product: Conventional fixed mortgage
Issue: Application, originator, mortgage broker

Complaint:
On XXXX XXXX, 2015, I called Network Capital to get a rate quote on an investor 15 year fixed-rate refinance mortgage loan on a residential townhouse that I am currently renting out. I stated up-front that I needed a quote on an investor loan refinance. The loan officer informed me that the range of interest rates of 15 year fixed-rate investor loan refinances is between 2.875 % - 3.25 % depending on LTV and credit score. Based on that representation, I proceeded to provide the loan officer with my information on the address of the property, the size of the loan, my salary, the fair market value, etc. He then stated that, since the LTV is at 60 %, I would be able to obtain the best financing at 2.875 % if my credit score is high. I assured him that my credit score is high and that I just want a quote. He said that he can not proceed with providing me a rate quote unless I provide him with authorization to pull my credit. I did not want my credit pulled, but with his representations that he provided that I would get the best financing at 2.875 % if my credit score is indeed high, I gave his the authorization to pull my credit. 
Upon pulling my credit, he determined that I have a high credit score. However, he then informed me that, since this is an investor loan, Network Capital will only provide an interest rate of 3.75 %. This interest rate is not the 2.875 % that the loan officer represented was available for those investor refinance applicants with a 60 % LTV and a high credit score. The 3.75 % interest rate is even beyond the interest rate range that he initially represented was available to investor refinance applicants at the start of the conversation. I would never have proceeded with the conversation and provided my personal information had I known that Network Capital was going to quote me an interest rate at 3.75 %. Further, I would never have authorized Network Capital to pull my credit had I known that the 2.875 % was not a real number for a 15 year fixed rate investor loan refinance. Dangling a phony teaser interest rate in order to induce me to apply for a loan and pull my credit is a clear Unfair, Deceptive and Abusive Act or Practice ( UDAAP ). In addition, I did not authorize Network Capital to pull my credit for a 3.75 % rate quote. That authorization, induced by a bait and switch, was invalid and pulling my credit report was thus contrary to the requirements of the Fair Credit Reporting Act. 
Further, the loan officer stated that Network Capital has a guarantee that it will beat any competitor 's rate quote. Accordingly, I sent the loan officer a GFE from a competitor on the same loan terms at 3.375 %. However, Network Capital failed to honor its rate guarantee by offering me a better rate or even the same rate as this competitor. Clearly, the advertised rate guarantee is phony in violation of UDAAP. 
Lastly, Network Capital never sent me a GFE on the application that I was fraudulently induced to submit. This failure to send me a GFE is in violation of TILA and RESPA.

Company public response: Company chooses not to provide a public response
Company response to consumer: Closed with explanation