Consumer complaint received 2019-02-22
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: WASHINGTON FEDERAL BANK (WA)

Starting in early XX/XX/2018, I applied for a lot loan through the XXXX XXXX branch of Washington Federal savings and communicated with the loan officer my plan to purchase and develop a parcel of real estate in rural XXXX County. 
I lacked prior training or experience financing purchases and developing real estate. I relied and acted upon Washington Federal 's professional advice concerning my plan to buy an undeveloped parcel and construct a home residence there. Advice was given by the loan officer there in the context of a confidential relational giving rise to a fiduciary duty. 
I explained to the loan officer that I was considering buying a parcel of undeveloped land located. The loan officer advised me that I could purchase the land with a lot loan from their bank, build a single family residence and refinance the loan into a conventional residential mortgage loan provided by Washington Federal. In early XX/XX/2018, I exchanged emails with the loan officer about this where I explicitly stated, " I'm realizing that what the county required to call a place a residence is pretty bare bones. I'm hoping that won't stand in the way of me being able to refinance into a home loan. I'd like to talk more about that and get extra reassurance if possible because I'm currently pretty nervous about it. It did seem though that if the county considers it a single family residence then you guys would too. '' The loan officer replied via email, " Yes, a SFR is pretty basic in parameters. I can talk to you more about that as well. '' We then had a discussion over the telephone during which the loan officer informed me that if I purchased the parcel with the lot loan and built a house that satisfied XXXX County 's criteria for a single-family home, I would be eligible to refinance the parcel with a home loan from Washington Federal, which was my plan from the beginning because a home loan would involve a lower interest rate and save me approximately {$60000.00} in interest over the lifespan of the loan. He explicitly stated that he asked their underwriter to be sure the information he was giving me was accurate and verified that the underwriter confirmed the information he provided. 
With this assurance, I moved forward with the purchase of the property, I decided to go with a loan from this particular bank, and moved forward the design for the building construction. 
In XX/XX/2018, when construction neared completion ( weeks away  from being deemed a legal permanent residence by the county 's building department ), I reached out to the same loan officer to initiate the refinance to a home mortgage loan. All construction and building permits had been paid for through personal savings. The bank requested blueprints of the newly built residence, which I submitted. After completing the loan application and submitting bank statements and pay stubs, the loan officer informed me via a phone call that their underwriter refused to refinance the property on the grounds that it did not meet their criteria. I expressed my shock to him and he stated that he too was shocked and understood why I would be upset. He stated that he recalled that my plan from the beginning was to build a small residence as cheaply and quickly as possible in order to refinance. He stated without my prompting or asking that he recalled checking with the underwriter before I made the purchase or moved forward with construction and that they had told me that I could build a legal residence by the county specifications and that would suffice to qualify for a home mortgage loan in a refinance by Washington Federal. This advice turned out to be inaccurate.