Consumer complaint received 2023-08-05
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: NY
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage

Complaint:
In XX/XX/XXXX, I decided to refinance my existing mortgage with Bank of America. I contacted my investment advisor at Merrill Lynch ( Merrill Lynch was acquired by Bank of America in XXXX and merged into Bank of America in XXXX ) and he introduced to a mortgage specialist. As evidenced by email exchanges, I was interested in exploring all refinancing options. At that time, I was not familiar with the specific formulas used to determine if I met the income requirements. After a brief conversation with the mortgage specialist, I was told that because I am retired, I do not meet the income requirements to refinance my existing mortgage. I was extremely disappointed because our " retiree assets '' almost doubled the amount of our existing mortgage, the market value of our home significantly exceeded the current mortgage and I have an excellent credit rating. I have been a Bank of America/Merrill Lynch client for over 20 years. As a result of our long-term relationship, I thought they would be the Lender that would most likely approve my refinancing request and reluctantly accepted the mortgage specialist 's, ( what I subsequently learned was not correct ) conclusion. 

A few months ago, our son applied for a mortgage, and I participated in a discussion with their mortgage specialist at XXXX XXXX Thereafter, I contacted the specialist and discussed my situation. I also became very familiar with the various formulas that are used to determine if you meet the income requirements to qualify for a financing. The calculations are based on ratios of your Monthly Debt payments to your Monthly Income and commonly referred to as DTI Calculations. Thereafter, I concluded that the mortgage specialist at Bank of America clearly made a mistake when he advised me that I do not have sufficient income. I contacted the mortgage specialist and provided him with my calculations along with other relevant information including the amount of our investment liquid assets at the time of our initial conversation, my excellent credit rating and how much the market value of our property exceeded the existing mortgage.

During that conversation, I was informed about the " discriminatory '' formula that is used to determine monthly income for only applicants that are retired. They discount your existing liquid assets by 30 % and divide the remaining 70 % by 360 months, on the assumption that you will hold the mortgage for the entire term of XXXX. In other words, if you have liquid assets of {$5.00} XXXX, Bank of America only allows you to include {$9900.00} in your DTI calculations. That is the same amount that an employee with gross compensation of {$110000.00} would be allowed to include. In my opinion, this formula clearly discriminates against retirees. However, notwithstanding the restrictions that are only applied to retiree assets, I provided several DTI calculations along with explanatory notes that documented my conclusion that I met their DTI requirements in XXXX of XXXX. I also provided Bank of America with a mortgage table that indicated mortgage interest rates for XXXX fixed-rate mortgages ranged from 3.23 % in XX/XX/XXXX and remained below 3.23 % through XX/XX/XXXX. 

I requested that the information I provided be reviewed and that Bank of America should make good faith equitable proposal to compensate me for the additional {$18000.00} of interest charges I incurred this year and the additional {$28000.00} of interest charges I will incur next year. The additional interest charges are being incurred because under the terms of my original mortgage, the interest rate of 3.06 % reset after 7 years, effective XX/XX/XXXX. This is the exact reason why I wanted to refinance my mortgage in XXXX and fix the interest rate for the rest of my life. 

The matter was eventually referred to the " Lending Escalation Team '' at Bank of America. They refused to comment about or discuss with me the previously provided DTI Calculations. In addition, notwithstanding documents were provided that confirmed I wanted to talk with a mortgage specialist about all refinancing alternatives, they questioned whether or not the conversation occurred because there was no evidence that I completed a mortgage application. The implication is that I should have disregarded that advice from the Bank of America mortgage specialist. 

I even suggested a fair equitable result would be achieved if Bank of America would simply agree to an interest rate modification of my existing mortgage to reflect the rates that were in effect any time from XX/XX/XXXX through XX/XX/XXXX ( the time period when under any circumstances the mortgage refinancing would have been completed ). I also stated that if that could be accomplished, I would absorb the additional {$18.00}, XXXX of additional interest charges I incurred this year. My request was denied, and I have been informed that as far as the " Lending Escalation Team '' is concerned, their " so-called '' investigation is complete, and this is a closed matter.

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