Consumer complaint received 2023-01-03
Product: Mortgage — Other type of mortgage
Issue: Trouble during payment process — 
Company: WESBANCO BANK, INC. (MD)

Inquiry/Complaint : Can a banking institution require repayment for funds they have not disbursed to me or any company on my behalf? 

In XX/XX/XXXX I closed on a One-Time Close Construction Loan with WesBanco Bank XXXX The total estimated amount that was to be financed was {$790000.00}. This amount included the lot, the cost of construction, as well as a $ XXXX contingency in the instance of any overages. The actual cost of construction is yet to be determined,, as construction has not begun. As with any construction loan, there are multiple draws that occur in order for the funds to be disbursed to the contractors/builder.To date, no draws for construction have occured. 

Currently, the principal balance on the loan is {$190000.00}. The construction loan required interest only payments during theconstructionphase. The interest only payments were on the {$190000.00} not the entire loan amount. I have now been informed, by WesBanco, that thebuilder has not met the deadline for the construction period and as a result, the allowed construction phase will end in XX/XX/XXXX and the principal balance and interest payments will begin in XX/XX/XXXX. 

The issue that I have encountered is that the payment amount that is set to begin in XX/XX/XXXX is not for the current principal balance and interest on the {$190.00}, XXXX that has been disbursed, rather it is on the complete budgeted amount of {$790000.00} - of whichWesBanco is currently holding {$600000.00}. Based on the lot finishing sheet that was provided by the builders to WesBanco, $ XXXX is contingency funds that may or may not even be used, as we will not know the actual cost of construction until it begins over a year from now. 

Thequestion I pose : Is abanking institution allowed to require repayment on funds they have not actually disbursed to myself or any company on my behalf? In this case, {$600000.00} has never been disbursed and is still with the bank however, my monthly mortgage payment will be approximately {$3700.00}, to cover repayment for the non-disbursed funds. 

WesBanco has stated that I am fully responsibility for the full mortgage payment on the total budgeted amount for the loan, even if they have not actually disbursed the funds.They have also indicated that if I would like to sell the lot and satisfy the loan, I would only owe the current balance of {$190000.00}. So there is a bit of confusion here as the monthly payments do not reflect the balance due. 

I understand making payments on what has been disbursed, but I don't quite understand how payments can be required on funds the bank has not disbursed andmaynot disburse, pending the actual total amount for construction once the build is complete. It would likely be more reasonable to understand if the bank disbursed all the funds to the contractor to put in escrow, however this did not occur and they still have the funds they are requesting repayment on. 

Can you please advise if this is an acceptablebusiness practice, as this is my first time purchasing via a constructionloan. 

Total Construction Loan Amount : {$790000.00} Total Draws/Disbursements to Date ( XX/XX/XXXX ) : {$190000.00} Current Payoff Amount : {$180000.00} Amount WesBanco has never disbursed : {$600000.00} Monthly Mortgage Payment to begin XX/XX/XXXX : {$3700.00} ( with or without an existing structure or any additional draws )