Consumer complaint received 2017-02-03
Company: PRIMELENDING, A PLAINSCAPITAL COMPANY
State: MA
Product: Mortgage
Sub-product: Conventional adjustable mortgage (ARM)
Issue: Application, originator, mortgage broker

Complaint:
In shopping for a mortgage on our first home purchase, we were contacted by XXXX XXXX, a loan originator with Prime Lending in late XXXX, 2016. XXXX XXXX offered us 2.625 % interest rate on a XXXX ARM, XXXX % down with a principal of $ XXXX. We were also offered {$2000.00} off our closing costs as part of the Homes for Heroes program, which offers discounts to XXXX like myself. We locked in with this rate of 2.625 % on a XXXX ARM on XXXX2016. 
We signed to the following loan costs on XXXX2016 : ORIGINATION CHARGES {$1700.00} LOAN ORIGINATION FEE {$560.00} PROCESSING FEE {$590.00} TAX SERVICE FEE {$80.00} UNDERWRITING FEE {$490.00} WIRE FEE {$35.00} Over three weeks later, days before XXXX, XXXX XXXX called us with an " issue '', claiming that XXXX, the chosen lender, would not issue ARMs to first time home buyers. With our closing date less than three weeks away, we did not have time to start over with a new mortgage broker and repeat the inspection, appraisal, and necessary documentation with another lender. 
XXXX XXXX put us in a position where we felt forced to follow his instruction or would otherwise lose our home purchase and {$36000.00} deposit. At this point, interest rates were on the rise post-presidential election, upwards of 3.5 % on a XXXX ARM. XXXX XXXX/Prime Lending offered a XXXX ARM through XXXX XXXX at 3.5 %, which could be bought down to 2.75 % with points, of which Prime Lending claimed to pay half. 

We felt forced to sign this new loan estimate in fear we would otherwise lose the home purchase. Our original lock rate at 2.625 % was not held up by Prime Lending, and now we were in a position to pay more money, and points, for a higher rate. On XXXX2016 we signed the following loan estimate : LOAN ORIGINATION CHARGED {$9400.00} XXXX % of Loan Amount ( Points ) {$5300.00} LOAN ORIGINATION FEE {$2800.00} PROCESSING FEE {$590.00} TAX SERVICE FEE {$80.00} UNDERWRITING FEE {$490.00} WIRE FEE {$35.00} The loan origination fee from the original XXXX16 estimate was {$560.00}, the new estimate has a loan origination fee of {$2800.00}. In addition, the {$2000.00} Homes for Heroes bonus that was originally offered was not presented to us. 

Prime Lending/XXXX deceptive mortgage loan process cost us over {$9000.00} and a higher interest rate than what was originally signed. In sum : This was a deceptive bait-and-switch on the part of XXXX XXXX and Prime Lending. The original 2.625 % on the XXXX ARM that we signed XX/XX/XXXX was not honored. As a loan officer, XXXX XXXX should have known that he could not offer a 2.625 % rate on a XXXX ARM ; he should n't have offered this product in the first place. His negligence cost us over {$9000.00} and a mortgage product we did n't want. In the end, Prime Lending should have paid down the points in full to make us right. We expect Prime Lending to return to us the {$5300.00} in points and the difference from the original loan origination fee, {$2200.00}, for a total return of {$7600.00}. We should not have to pay {$7600.00} for an inferior mortgage product and unfair practice. 

This mortgage loan process caused significant hardship for our family. We risked losing our home, our {$36000.00} deposit, and were led down a deceptive path of changed circumstance and increased fees, for which we should not be responsible. We expect Prime Lending to pay us the {$7600.00} that we deserve to have returned.

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