Consumer complaint received 2017-04-24
Company: CITY NATIONAL BANK
State: CA
Product: Mortgage
Sub-product: Other type of mortgage
Issue: Trouble during payment process

Complaint:
To Whom  it May Concern, Summary : I am  writing in regards to a recent re-finance that my husband and I engaged in on our commercial property. For the purposes of the refinance we moved our mortgage away from City National Bank to a new bank. My complaints are in regards to :  ( 1 ) t he opacity and one-sided nature of the City National Bank yield maintenance pre-pay penalty language as presented in our original note ( dated  XXXX   XXXX ,  XXXX   )  and  ( 2 ) City National Ba nks failure to honor the prepay penalty amount in their original demand lett er ( d ated  XXXX   XXXX ,  XXXX   ) d espite the fact that the re-fi transaction closed within 30 days.       Timeline of events and corresponding attachments, from  XXXX   XXXX ,  XXXX - XXXX   XXXX ,  XXXX  : - XX/XX/XXXX  : We move our mortgage on our property to City National Bank  .  Attachment  # 1 is the Property Deed   between our family trust and City National Bank dated  XXXX   XXXX ,  XXXX , and signed by my husband and myself. Please notice the pre-pay language that stretches for  XXXX  pages, from the end of Page  XXXX  to the end of page  XXXX . Section  XXXX  is of particular importance for the sake of this discussion.     Fast forward more than 2 years later - XX/XX/XXXX  -  XX/XX/XXXX  : We are unable to agree to new re-fi terms with City National B ank so my hus band and I decide to take our business to  XXXX   XXXX   XXXX . On numerous occasions I asked about the pre-pay penalty calculation. I would think that as a fairly educated person I should be able to calculate the penalty amount on my own, but this was not the case. My colleagues and I all came up with different numbers ( all folks with MBAs in finance by the way ). When I aske d City National to  calculate it for me it would take days and sometimes weeks, after multiple requests, to receive a response.     - XX/XX/XXXX  : City National bank furnishes the attached demand letter addressed to th e Title Company   ( Attachment # 2 )  dated  XX/XX/XXXX  in which our pre-pay penalty for re-financing our property is {$5200.00}. The letter has no expiration date and provides a calculation for each day beyond the  XXXX  day. Given the fact that it is industry-standard practice that these demands are good for 30 days, and no expiry is provided, we considered their demand to be final. As any rational consumer would do, we then based our financial plans and final loan agreement with  XXXX   XXXX  on all the demand letters submitted, including this one from City National Bank for the pre-pay penalty of {$5200.00}.     - XX/XX/XXXX  : Roughly 27 days following the date of that pre-pay demand letter fro m City National  we close. The closing statement dated  XXXX  is attachment  # 3. No te that the pre-pay penalty of {$5200.00} corresponds to the  XXXX  City National Bank pre-pay letter.     - XX/XX/XXXX  : The Title company is contacted by City National Ba nk saying that the pre-pay penalty amount wired needed to be updated to reflect the increase in interest rates and threa tens to return the wired funds if the balance is not paid immediately. An updated demand letter is produced by CNB. See attachment  # 4 for t he new demand in addition to attachment  # 5 for t he correspondence betwee n the Title co mpany and City National Bank. Attachment #  6 is  the final closing statement provided b y Title d ated  XXXX   XXXX ,  XXXX . Notice that it does not correspond to the  XXXX  revised CNB demand letter. There was so much confusion caused by the calculation in the  XX/XX/XXXX  note, even internally at CNB, that the final calculation would change daily and sometimes multiple times in the same day during this period. Eventually the prepay penalty balance due arrived at a total of {$6300.00 } ( or  {$11000.00}, the new pre-pay penalty, minus the amount already wired, {$5200.00}  )  - XX/XX/XXXX  : I am notified by my banker at  XXXX   XXXX  that we must furnish an additional balance due to  City National on a ccount of the pre-pay penalty change. My reaction was utter disgust. First City National Bank designs its prepay penalty language to be so confusing as to be unintelligible to even someone with above average intelligence and an  XXXX . And, on top of riduculous math, the language is written in such a way that  City National c an capitalize on swings that give them a favorable outcome, but we as the borrower fail to receive the same consideration. Would CNB be chasing us down for a refund had interest rates gone the other way or would they claim they could not due to administrative convenienc e ( Section   XXXX  )? I am confident it would be the latter. Then, to change the pre-pay penalty owed AFTER WE CLOSED even though we closed within the industry standard 30 days? How can any average consumer or business owner make plans if the amounts owed are a moving target?     - XX/XX/XXXX  : For 3 days I attempt to reach a favorable resolution with City National Bank and unable to do so. Title wires {$6300.00} on  XXXX  so that the transaction can be completed,  XXXX   XXXX  can move into first lien-holder position and to prevent return of all wires. I cut a check the same day to the title company for {$6300.00}.     Conclusion : City National Bank acted deceptively. Their contractual language is purposely confusing and rigged to favor City National Bank depending on the circumstances. Same goes for their pre-pay demand letter. I would like to understand what recourse I have in recovering the additional balance of {$6300.00}.

Company response to consumer: Closed with explanation