Consumer complaint received 2024-12-04
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Changes in loan terms during or after closing
Company: U.S. BANCORP (WI)

This complaint pertains to an adjustable rate mortgage ( ARM ) that my wife and I signed with US Bank in XXXX, XXXX. In XXXX, XXXX, my wife and I began shopping for homes and mortgages. After getting mortgage quotes from a few different lenders, we proceeded with US Bank because they offered us the most favorable terms, including a quoted interest rate of 5.125 %. We then obtained a mortgage preapproval from US Bank. On XX/XX/XXXX, we had an offer accepted on our house with a closing date of XX/XX/XXXX. In XXXX, leading up to our closing date, we worked with US Bank to finalize the mortgage and close on our house. In early XXXX, we exchanged emails with US Bank confirming that we were locked in to the 5.125 % interest rate that they had quoted for us. US Bank also provided us with a document titled Mortgage Loan Approval that confirmed our 5.125 % interest rate. 

However, following our offer on the house being accepted, US Bank asked us to sign an initial disclosure document that included an additional closing cost charge of {$1200.00} for points worth 0.39 % in interest, which would be charged on top of our previously agreed 5.125 % interest rate. I emailed US Bank asking why these charges were included in the disclosure. US Bank told me to sign the initial disclosure form since the loan terms would change significantly in a later closing disclosure form. 

Then, just a couple business days before our closing date, US Bank asked us to sign a closing disclosure form that still included the charge for points. I emailed US Bank asking why these charges were included. I never received a response from my Mortgage Loan Officer, but after pestering US Bank I received a phone call from my Mortgage Loan Officers supervisor asking me what the problem was. I told him that I did not accept the additional charge for points, and he responded that this charge was included due to the rising interest rate environment. I responded that this is why I had previously locked in to our interest rate. I asked him to withdraw the charge for points, but he did not accept. 

Given that we were already at an advanced stage of closing on our house, and because interest rates had been rising rapidly at the time, we ultimately signed off on the mortgage and purchased on our house. However, US Banks charge for points was fraudulent. First, according to US Banks own website ( https : //www.usbank.comXXXX  ), mortgage points are essentially a form of prepaid interest you can choose to pay up front in exchange for a lower interest rate. This charge amounts to additional interest that US Bank charged after we had already agreed upon our interest rate. Second, US Bank waited until late in the process to introduce these charges when we had little leverage to pull out of the deal - after we had already had an offer accepted on our house and were nearing our closing date. Finally, US Bank was not honest about these charges. When we initially asked questions, the bank first pressured us to sign documents while stating that the loan terms would change later on. Then, when we were approaching our closing date, the bank was unresponsive when I continued to ask questions. 

Here is a description of each of the attached documents, with dates : 1. XX/XX/XXXX : The final offer on our house is accepted and signed by us ( the buyers ) and the sellers with a closing date of XX/XX/XXXX. 
2. XXXX : I exchange emails with US Bank confirming that we are locked in at an interest rate of 5.125 %. The email refers to the rate shown in the estimate from document # XXXX. 
3. XXXX : We receive a document entitled Estimated Loan Summary that includes an ARM interest rate of 5.125 %. 
4. XXXX : Email exchange with US Bank. We received an automated request to sign an initial disclosure form that included a charge for points. I initially refused to sign the form. However US Bank tells me to sign the form and says that the loan estimate will change for the final disclosure. 
5. XX/XX/XXXX : We receive a document entitled Mortgage Loan Approval that specifies an interest rate of 5.125 %. 
6. XXXX : Email exchange with US Bank. We had received closing disclosure documents that still included the charges for points. I did not sign the document and began emailing US Bank to ask questions about this charge. They initially did not respond to my questions before I eventually received a call from my Mortgage Loan Officers supervisor. 
7. Our signed loan package including the charge of {$1200.00} for points.