Consumer complaint received 2023-09-04
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Confusing or misleading advertising or marketing
Company: HIGHLANDS RESIDENTIAL MORTGAGE (CA)

I am writing to file a formal complaint against Highlands Mortgage, a division of Highlands Residential Mortgage LTD, concerning a lock-in fee that I paid to secure a mortgage rate for the purchase of two new-build homes. I believe there has been a violation of the terms of our agreement, and I seek your assistance in resolving this matter. 
In 2021, I entered into a contract to purchase two new-build homes, with the recommendation of my real estate broker, XXXX XXXX XXXX Given the rising interest rates at the time and the anticipated delivery date of the homes in XX/XX/2021, I contacted Highlands Mortgage, headed by XXXX XXXX, to lock in a favorable mortgage rate. The company offered a rate lock program that required a lock-in fee of 1 % of the loan amount, which amounted to {$1600.00} for each property, totaling {$3300.00} for two homes i was planning on purchasing. 
Highlands Mortgage assured me that they would hold the locked-in rate for up to one year and that I could potentially adjust the rate downward within 30 days of closing if rates were to drop. I signed a contract and promptly submitted the required lock-in fee. Over the course of a year, the construction of the new homes faced significant delays due to Covid-related supply chain issues. 
Given the ongoing delays and concerns about the solvency of the builder, I contacted XXXX XXXX and XXXX XXXX to discuss the cancellation of the loan. At this point, it was evident that the loan would not be closed within the originally stipulated one-year time frame. According to the terms of the contract, " IF the loan does not close before the expiration date of the lock-in agreement through no substantial fault of the borrower, the borrower may withdraw the application whereupon the lender shall promptly refund to the borrower any lock in fee paid by the borrower. '' However, a conflicting statement appeared in a second addendum that I also signed. This addendum stated that " the deposit is non-refundable and will be forfeited to the lender if the borrower does not close with Highlands Residential Mortgage LTD for any reason other than denial. '' While I acknowledge that I signed this second addendum, I believe it directly contradicts the initial agreement and request for a refund. 
Despite my efforts to reason with Highlands Mortgage and clarify the situation, their team has maintained that my deposit can only be refunded " at the closing table. '' I have undertaken research and consulted with colleagues, all of whom have indicated that withholding the lock-in fee under these circumstances may be unlawful. 
I am seeking assistance from the Consumer Protection Bureau to investigate the legality of Highlands Mortgage 's actions and provide guidance on whether I am entitled to a refund of my deposit. While the amount in question may be {$3300.00}, it holds significant value for individuals like myself. Additionally, the potential impact on future transactions with the company, coupled with the uncertainty of their terms, has raised concerns about the ethical practices of Highlands Mortgage. 
I kindly request your intervention to resolve this matter and provide clarity on my rights as a consumer. Your guidance and expertise will be greatly appreciated in ensuring a fair and just resolution. 
Thank you for your attention to this matter. I look forward to your prompt response. 
Sincerely, XXXX XXXX