Consumer complaint received 2021-07-08
Company: GSF MORTGAGE CORP
State: WA
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
In XXXX of XXXX I entered into a contract with XXXX XXXX to build a home on a five acre lot that I own outright. They had a preferred lender, XXXX XXXX ( a partner agency with XXXX ), for the construction loan. I agreed to use XXXX XXXX, but they used GSF Mortgage for a construction to mortgage loan. At the time I was working and residing in XXXX NM, with plans to retire in XX/XX/XXXX. 
Since I was retiring and moving to the XXXX area, we listed and sold the home we had in XXXX. My intent was to use the proceeds from the home sale to pay down the construction loan/mortgage. I asked the loan officer, who worked for XXXX ( which was prior to them transferring the loan to GSF ) if I could pay the principal down. He informed me that I could do so ( see attached email ). 
I was approved for a loan amount up to {$440000.00}. GSF made a draw against the loan of {$17000.00} to cover closing costs and escrow. GSF place {$7600.00} into escrow to cover property tax and insurance through the construction loan and the first year of the mortgage after modification. The actual amount subject to interest should have been {$9300.00}. After reviewing my payment history, I found that I paid interest ( at 6 % ) from XX/XX/XXXX to loan modification on XX/XX/XXXX on {$17000.00} rather than {$9300.00}. Additionally, the first interest amount charged appeared to be high even for the {$17000.00}. I have attached the draw summary as well as my payment summary. Based on my computations the interest I should have paid for the initial draw is {$560.00} ( {$9300.00}. x 6 % APR ) over the course of one year, however it appears that GSF charged me for interest {$17000.00} over the course of one year, estimated at {$1000.00}, a discrepancy of {$460.00}. 
I received one or two statements at the beginning of the loan process, but after XXXX of XXXX I did not receive any statements, only payment notices. I paid several by check ( sent via USPS ), but the remainder I paid on the GSF site. The site did not permit me to see a summary of the draws, only the required payments and payment history. I had no visibility on the loan as a total either on line or via statements throughout the duration of the loan. I had to request information from the loan administrator, who only provided me with screenshots or emailed summaries. This lack of visibility made it extremely difficult to monitor the account to ensure it was correct. 
On the GSF payment stub dated XX/XX/XXXX it shows that the total draw amount was {$400000.00}, however the actual total draw amount was {$390000.00} ( the payment stubs and the draw summary are attached ). GSF used the erroneous amount of {$400000.00} as the payoff amount once I refinanced ; they included {$6700.00} that was the amount in escrow. They believed that was a holdback for finishing a painting job ( see explanation below ), but the funds had already been drawn and were to be held from XXXX until they finished painting, not an additional amount charged to me. 
We sold our home in XXXX in XXXX of XXXX and I immediately requested to pay the principal down. The loan administrator informed me that I could not pay the principal until the loan was modified into a 30 year mortgage. I explained that I was informed that I could pay the principal, but I was not permitted to do so. I have provided a copy of the email validating that I was informed I could pay the principal. I contacted the XXXX XXXX supervisor, who said I was misinformed. The GSF loan administrator then informed me that the modification would be for the full value of the loan ( {$440000.00} ) and that I would not be able to pay the principal until after modification. The loan could then be re-cast within 30 days, which is when I could pay down the principal. I had requested several times to pay the principal or make a down payment to reduce the loan amount, but was not permitted to do so. 
XXXX XXXX was significantly behind on the construction of the home ( it was due to be complete in XXXX of XXXX, but was not complete until XX/XX/XXXX ). As construction was completed, the loan was due to be modified. As it came due for modification the loan administrator asked if I had changed employers. I informed her I had retired and provided my income verification letter for my retirement pay. I again asked to pay the principal down, but was denied. She informed me that XXXX XXXX would not insure the loan because of the reduction in income. I informed her that if they would permit me to pay the principal down ( I intended to pay {$200000.00} ) that there would be no problem qualifying. Additionally, I informed her that I had not used {$45000.00} of the construction loan, therefore the balance due should have been {$400000.00}, not {$440000.00}. She informed me that the {$45000.00} had to be included because it was what the original loan agreement had. I informed her that should not be the case and that I should not pay interest on funds that I did not draw. She informed me that the amount would be removed after re-cast. 
On XX/XX/XXXX the loan administrator contacted me stating that the loan could not be re-cast and again stated that XXXX XXXX would not insure the loan, but it had been modified. I again asked about the unused {$45000.00} and paying the principal down. I did not receive a firm answer, but was referred to the GSF assistance site. I sent an email explaining that I had just had a construction loan modified to a mortgage and asked if I could pay the principal. I was informed yes, so I paid {$200000.00} which was to be used for the first mortgage payment and to pay the principal down. The customer service rep ( only known to me as XXXX ) called me later the same day. He informed me over the phone ( there is no email traffic ) that I could not pay the principal down until a 10 digit loan number was applied to it and that it was likely that the finance section would not permit the payment. I expressed my displeasure overall with GSF and informed him that I was seeking a re-finance with another lender because of all of the problems I had with GSF. He informed me he would contact the loan administrator and promised to provide me with his contact information. 
The following day I was contacted by the loan administrator, who asked how the {$200000.00} was to be allocated. I informed her that the first payment was to be paid from it and the residual used as a principal pay down. I never received an email back from XXXX with his contact information. 
I was aware that my property tax was due at the end of XXXX, so I checked the County website. The property tax had not been paid, so I asked the loan officer, on XX/XX/XXXX, to ensure it was paid. She informed me that it was not GSFs responsibility to pay the property tax and it was the borrowers responsibility. I checked my loan documents and saw that GSF was responsible for paying the property tax out of escrow and they had in fact put a significant amount of funds in escrow for property tax and insurance. I did not want to risk being late on my property tax so I paid it myself and expressed my displeasure. 
After my principal paydown and considering the unused portion of the construction loan, brought the principal balance to 38 % of the loan amount, I asked the loan officer to ensure that I was not charged mortgage insurance on XX/XX/XXXX. Her initial reply was that I would have to continue to pay ( see attached ). I sent a formal email on XX/XX/XXXX requesting the mortgage insurance be discontinued. GSF held their ground and stated that it was necessary for me to continue to pay mortgage insurance. I replied that they were violating the mortgage agreement as well as the Homeowners Protection Act, so they relented and reimbursed the mortgage insurance. Although resolved, it is concerning that the company would try to charge mortgage insurance when they should not. 
Because of the myriad of problems with GSF and the fact they refused to recast the loan, even though they informed me that would happen, it was in my best interest to refinance through a different lender. I applied for a mortgage through XXXX XXXX XXXX XXXX and was approved. I had to pay closing costs on that loan that totaled {$7200.00}. 
I did a thorough review of the construction loan to mortgage. I have attached a spreadsheet with my findings. The discrepancies found include the {$5600.00} mentioned above, an overcharge of {$370.00} in interest post-loan modification, and {$460.00} paid in interest on funds held in escrow. The total discrepancy is {$6500.00}. 
Throughout the refinance process GSF provided four different payoff quotes, all of which showed a different amount. The principal amount used was incorrect on all of them ( addressed earlier ) and their computations were incorrect. They quoted a payoff amount of {$190000.00}. Based on my calculations the payoff amount should have been {$190000.00}, a difference of {$5600.00}. I informed the loan officer of this discrepancy on XX/XX/XXXX. She replied on XX/XX/XXXX and stated that my figures were incorrect, providing an inexplicable explanation. 
I reviewed my original loan agreement, the draws made, and my estimate of the escrow payments that should have been made. GSF had never provided me with a breakdown of any escrow payments throughout the course of the loan. I created a second spreadsheet, which resulted in the same principal information as the first, but there was a slight difference in the escrow holdover based on my estimate. I sent that spreadsheet, along with an explanation to the loan officer that the funds held in escrow for painting were due to XXXX, the builder, not finishing the painting. Those funds had already been drawn by XXXX. I asked for an accounting of the escrow payments and explained that {$7600.00} had been put in escrow at the beginning of the construction loan, but I had no information on how those funds were used. 
I have asked GSF on several occasions to have an independent person review the account as I believe that the loan officer does not want to admit that she made any errors. I have never received an itemization of my account from GSF, which raises great concerns, but also makes it difficult to reconcile the account. I request that a full accounting of the loan, from construction to mortgage be conducted and that my concerns be evaluated. Should they be substantiated, I request that GSF not only reimburse me for the errors they made, but also reimburse me for the cost of my refinance.

Company response to consumer: Closed with explanation