Consumer complaint received 2018-03-27
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: LD Holdings Group, LLC (AZ)

I am writing to request the CFPB investigate Loan Depot NMLS XXXX and their deceptive lending practices that have caused this consumer harm. 

On or about XX/XX/XXXX I was contacted by XXXX XXXX a licensed Arizona Mortgage Lender NML XXXX from an inquiry that I had made through XXXX XXXX. After gaining my trust he explained the loan programs available to me. I was asked what I believed the value of my home was and how much was my 1st mortgage. Based on my review of the information available to me through sites that show sales comps in my neighborhood and some recent sales in the last 45 days at {$180.00} sq/ft I shared this information with XXXX. XXXX took my information and qualified me with XXXX and XXXX XXXX XXXX XXXX. The XXXX value was around $ XXXX and the XXXX Home Value was around $ XXXX. At an 80-85 % LTV the XXXX Valuation would work but at the XXXX $ XXXX it wouldnt. XXXX said that there shouldnt be any problem as the XXXX estimator tended to always be lower and more conservative. When I asked what his experience has been with his borrowers on appraisals he said that they generally come in closer to the XXXX Values. This was important for me because I didnt want to risk paying for an appraisal and not get the loan. He made me feel confident that the appraisal should not be a problem. I understood the risk and I told him that I would think about it and contact him. 

On XX/XX/XXXX I responded to a survey from Loan Depot with the following to assist in illustrating the deceptive practices : XX/XX/XXXX - Contact XXXX ask what is necessary to make application. Inquire to the current rate. He said same as yesterday 7.5 %. Ask him what I need to do. He says 2 years of W-2 's, 30 days of Pay Vouchers, and the Home Insurance Company and Policy No. He says I can email, fax, or he will send a link to upload securely. He says he has a meeting in a couple of minutes but will send the link. I arrive home from the office to start working on the documents. No link. Email XXXX about no link. He says there is a technology issue and will send in a few minutes. Get the link and upload the documents. XXXX says that he will prepare the disclosures and to proceed will need to electronically sign them. Receive the disclosures. Get on the phone with XXXX to review the disclosures. Get to the loan terms and the rate is 7.65 %. I call this out, and XXXX says " Huh ''. There hasn't been a rate change. He yells over to his manager, there is are some cross talk between XXXX and his manager and XXXX returns and says, Well the rate increased. So in the end poor communication regarding one of the most important parts of the transaction the interest rate XXXX did explain that once we sign the disclosures the rate will lock but if the rate decreases there is an opportunity to float the rate down. 
XX/XX/XXXX - Notice the the 10 Year US Treasury has declined and send email to XXXX to ask what the rate is. Receive this. 
Hey XXXX, Everything should be the same as yesterday, we havent had any adjustments so far. I did however just get an update from the processing team a few minutes ago and we have everything we need but they are just requesting 1 mortgage statement for your existing mortgage. This should be all we need and we are good to go! 
XX/XX/XXXX Upload the mortgage statement Receive this from XXXX later in the day Hey XXXX, I just got update from processing that file is ready to proceed/lock but they requested bank statements that show at least {$4700.00} for reserves on the account. This can be a bank statement, 401K, or whatever kind of investment account that shows this balance. Can you send these over really quick and then I can lock the rate in for you? Rate today is the same@ 7.5 %. 
Can you send this over to lock your rate? Wasn't my Rate locked per the signing of the disclosures as we discussed? And the rate is the same@ 7.5 % XX/XX/XXXX Receive an email saying After receiving your intent to proceed with your loan as disclosed on your Loan Estimate or Good Faith Estimate and your authorization to charge your credit card ending in XXXX ( as evidenced by your executed Appraisal Deposit Agreement ), your credit card has been charged {$180.00} for your appraisal deposit. 
As discussed with XXXX XXXX, your rate lock period will expire on. As disclosed in your Appraisal Deposit Agreement, your Appraisal Deposit is refundable in the following circumstances : Respond to XXXX Please review below. The date of the rate lock is <blank>.  Would you correct and resend? What is the rate today? 
To add insult to injury I get a request from XXXX for Bank Statements.

So my questions are : Mortgage Statement and Bank Statement would be " Standard '' documentation based on my experience in the lending business. Why weren't these asked for at the beginning so I didn't have to start and stop multiple times? Why isn't XXXX consistent with rate information? 

As you can see the communication of the rates to the prospective borrower and how to lock the rate werent consistently communicated. 

On XX/XX/XXXX an Exterior Appraisal was sent to me that showed a value well below the values that I shared with XXXX and he confirmed while qualifying me as a borrower. I contacted XXXX and asked to speak with his manager and he wouldnt agree to transferring me or getting his manager on the phone with the both of us. After a few less than service oriented emails from XXXX I gave up and contacted via email his manager directly. I was contacted by XXXX XXXX who apologized and was interested in making things right. We reviewed some other options, 1. A personal loan product 2. The options to pay for a Summary Appraisal instead of just an  Evaluation. The cost would be an additional $ XXXXUSD. He explained that the type of valuation that was done is known to NOT be an accurate value especially in some areas. He pointed out that he knew that in my neighborhood that it was almost impossible to purchase a XXXX sq/ft home for less than $ XXXX. He also shared a story of a borrower of Loan Depot in XXXX whos evaluation came back at $ XXXX which they didnt qualify for the loan, but when they paid for a Summary Appraisal the value came in at $ XXXX. 

I asked why I wasnt offered to have a summary appraisal and he had no answer. He did shift the blame to the government and the 3rd Party Appraisal firm for the information. This deflection may work with some borrowers but my experience is different so I didnt accept. I tried to explain to him that Loan Depot picked the product ( which they know to be cheaper and less accurate ) not me and when I asked why I wasnt offered a summary appraisal based on their knowledge that the Evaluation product isnt reliable he tried to deflect again.

I told him in fairness that I was going to share my experience with the Government because Loan Depots process is unfair and deceptive. How can a mortgage company use online resources to qualify a borrower that doesnt use the same methodology as the 3rd Party Vendor that they contract with for their evaluations and put the consumer at risk to lose money. That isnt fair. How can a mortgage company use a valuation product that they know not to be accurate? That sounds deceptive to me. Additionally, there were errors in the Evaluation. The sq/ft of the my home was taken from the County Tax Records, which the county deems themselves as unreliable. And the only sales comps were taken in my neighborhood but didn't include the recent sales that were supporting the values that were used to qualify for the loan.

So in closing I would like the CFBP to investigate my claims with Loan Depot and to order them to stop these practices so that the consumer is not misled into risking their money in the attempt to acquiring a loan. Thank you for you consideration in this matter.