Consumer complaint received 2016-10-21
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: VA
Product: Mortgage
Sub-product: Home equity loan or line of credit
Issue: Credit decision / Underwriting

Complaint:
I allege that USAA Bank uses unethical business tactics to trap consumers in high interest rate home equity loans ( HELOC ), particularly taking advantage of those consumers who have been negatively impacted by the US real estate crisis. I have attempted to work with USAA in good faith to resolve my specific issue but the company has not remedied the situation. The particulars of this matter are as follows : 1 ) I opened a HELOC with USAA XX/XX/XXXX with a credit line of {$75000.00}. The HELOC product was a variable rate loan but had a hybrid feature which enabled consumers to " lock '' a portion of the loan balance into a fixed interest rate. I elected to lock a portion of my HELOC at a fixed rate ( approximately 7 % ) and also have a portion of the loan open at a variable rate ( 2.65 % ). 
2 ) XX/XX/XXXX, just over one year after the original application and underwriting of the HELOC, USAA informed me that they were immediately suspending the loan due to a drop in the market value of my home. 
3 ) Between XX/XX/XXXX and XX/XX/XXXX, interest rates declined to record lows ; however, I continued to service the fixed portion of the HELOC on time. Currently, the total outstanding HELOC balance is approximately {$46000.00}, of which {$25000.00} is variable rate and {$21000.00} is fixed rate. 
4 ) The account information for my HELOC displayed on USAA 's website ( refer to exhibit ), reflects a " credit limit '' of {$75000.00}, an outstanding balance of {$46000.00} ; but XXXX in available credit, which is confusing and deceptive to the consumer. 
5 ) XX/XX/XXXX, I contacted USAA about temporarily utilizing the indicated credit limit to convert the fixed portion of the HELOC to more favorable variable rate terms, which would lower my monthly payment and enable me to pay off the loan faster. This approach would not permanently increase the total outstanding loan balance or alter the risk exposure of the loan. 
5 ) USAA ordered an onsite appraisal on my primary residence which showed that the property is not underwater ( ie. appraised value exceeds sum of first mortgage plus HELOC ). However, USAA denied my request to convert the fixed portion of the loan to variable rate terms. 
4 ) I then requested USAA, a sophisticated full-service bank, to explore other potential solutions to modify the interest rate on the fixed portion of the loan ; however, I was repeatedly rebuffed and informed that the only option was to pay off the fixed portion of the loan in full, or voluntarily stop paying on the loan and hope to trigger a workout plan or modification ; however, that approach would damage my credit rating. 
As a result of these acts, I am left with the choice of remaining in a high interest HELOC or sacrificing my credit rating by refusing to pay the loan and hoping to trigger a rate adjustment modification. Clearly, this is not in the best interest of anyone.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation