Consumer complaint received 2020-01-18
Product: Mortgage — FHA mortgage
Issue: Closing on a mortgage — 
Company: GUARANTEED RATE INC. (NJ)

This is in follow up of the complaint I filed with CFPB XXXX and XXXX Kindly see my response to GRI : Thanks to GRI for the response after a long time, as usual. 
The explanation given by Guaranteed Rate ( GRI ) are misleading to me. They admitted their faults with first 2 contractors but want to hide the misuse of loan. Ms.XXXX XXXX of GRI repeatedly said the loan amount is banks money and not my money. I have no control but I have to pay the interest for the money which the bank would use at their own will. This is not what the HUD Regional office and consumer bureau said. They referred the case to banking and insurance department. 
All contractors were given the information of the Contingency Fund in advance by Guaranteed Rate, luring them to steal money from that fund. In my case you can see the proof attached ( Exit Draw XXXX XXXX XXXX ) disclosing the contingency amount to contractors. The first fraud contractor was always craving for that money and asking me to sign change orders unnecessarily. Same tactics by second contractor also. You can also see HUD consultant advising Lender in the Notes to pull back the overpaid money for siding materials which the lender paid the contractor. Contractor didnt deliver and didnt do any job. I didnt sign that check and HUD consultant said he also didnt knew. 
Mr.XXXX XXXX stated in CFPBs response : However, it is against GRI policy to recommend any contractor for use by a borrower in a renovation loan transaction, and GRI employees followed that policy here. 
Please see the GRI Vice presidents picture and Guaranteed Rates advertisement in the website of a fraudulent contractor named XXXX in the XXXX County. This was the first contractor who gave me an exorbitant quote XXXX $ 50K more than other contractors ). Customers of this company warned me saying that this contractor would steal money through change orders after signing contract. So at the displeasure and against the recommendation of Guaranteed Rates VP Mr.XXXX XXXX I decided to look for other contractors. I got quotes from several contractors from 180K to 220K for the entire project that involved add a level and kitchen renovation. ( Recently the contractor website removed GRI VPs picture ). 
This is a small house of less than 1300 sq.ft and this is our only primary residence. We put in all our hard earned money and all life savings to repair damages by two hurricanes. Now after taking this 203K Whole Home Renovation Loan we lost {$40000.00} out of our pocket since the Lender overpaid fraud contractors who violated codes, failed inspections and did shoddy works that needed more demolition. For every contractor this was a silly project.

The NJ state law has been strict after many contractor fraud litigations following Hurricane Sandy and Hurricane Irene. Contractors shouldnt be paid any money for incomplete works, shoddy works and failed codes. But Guaranteed Rate paid money to the two contractors who did not even passed a single inspection and failed municipal codes on multiple occasions. We had to demolish and redo works done by XXXX XXXX XXXX and XXXX and lost a huge amount money out of pocket. 
After taking the matter with County Consumer Bureau and XXXX XXXX Consumer Bureau, I informed Guaranteed Rate Manager Mr.XXXX XXXX not to overpay the fraud contractors ( many email proofs are in my collection of over 200 emails and pictures I sent to Guaranteed Rate copying HUD consultant ). After reviewing the case the County Consumer Bureau advised me that XXXX XXXX XXXX XXXX ( first contractor ) was complete fraud and violated all laws and no money should be paid to exit work. As per XXXX XXXX  Consumer Act contractors can not put lien on properties in New Jersey without going through arbitration or court. County Consumer Bureau called XXXX XXXX XXXX XXXX   and warned them that their contract was a violation of many State Laws, and Bureau would not arbitrate for this case due to the fraudulent nature. Bureau told XXXX XXXX XXXX to exit and allow homeowner to complete the project with other contractors. 
The first contractor was paid for siding materials by Guaranteed Rate without my knowledge and without the knowledge of the HUD consultant. See the check attached. ( There are emails and text messages with HUD consultant proving this ). One check without my name and signature is attached that was delivered to First contractor ( XXXX XXXX XXXX ) in XX/XX/XXXX, 3 months after terminating this contractor for fraud. ( Please see attached check without my signature ).

To avoid overpaying the second contractor ( who promised to finish work in 4 weeks but dragged my family for 6 months ) I kept warning HUD consultant, Ms.XXXX XXXX and Mr.XXXX XXXX, Manager of Guaranteed Rate. They agreed that they would not pay for incomplete change orders and incomplete works. When the final checks for XXXX was sent to me for signature I found that the lender took money from the contingency fund to pay for an incomplete change order. At that time more shoddy works and code violations were getting exposed by the third contractor. Capnovate didnt complete certain things which they agreed to do during exit inspection ( not even removing the garbage ). 
After consulting with the HUD and consumer bureau I was advised that if you are paying the loan and interest it is your money and money doesnt belong to XXXX. Bureau said my Lender is misleading me. I had to withhold one contingency check in my name so that it should go back to the contingency fund and the new contractor could be paid to finish the incomplete and shoddy works of XXXX. Therefore I didnt clear this check amount {$2900.00}. HUD regional office was surprised when they heard that the Lender used the Contingency funds to pay the fraudulent contractors who violated the HUD laws, State laws and US consumer laws. 
Mr.XXXX XXXX stated in the CFPB response : On or around XX/XX/XXXX, BH completed the repairs to the Subject Property, and GRI closed out Mr. XXXX rehabilitation escrow account, with {$17000.00} in remaining unused funds being used to reduce Mr. XXXX principal indebtedness. 
3 months have passed after sending the Lender the occupancy certificate there has been no communication from GRI about the loan closing. Where is the {$17000.00}?. I have been paying interest for XXXX to Guarnateed Rate, {$4300.00} every month since XX/XX/XXXX to XX/XX/XXXX and after that paying to XXXX XXXX {$4300.00} since XX/XX/XXXX. ( See attached XXXX XXXX excuse in XX/XX/2019Million Times I asked for statement. Till today I havent received it ) According to XXXXr the servicing amount transferred to them is $ XXXX. They are still charging me interest for $ XXXX. ( See attached statement from XXXX ). 
Over the last 21 months I paid {$91000.00} to Guaranteed Rate and XXXX Still my Principal according to XXXX is {$610000.00}. So where is the {$17000.00} Guaranteed Rate claims returned to my principal? Where is the deduction of monthly principal I paid, from the {$91000.00}? 
Please give me the list of checks you gave to the fraud contractors without my signature and address. I have attached one copy of check that was unknowingly send to me by Guaranteed Rate which was sent to XXXX & XXXX directly by Lender. 
With deep regret I have to tell you that my family and I had to go through several instances of intimidations and threatening behaviors from the contractors, Lender and HUD consultant. Talking to XXXX XXXX XXXX XXXX was always intimidating, disrespectful and misleading. My 3 minor children and wife have been going through XXXX and XXXX over the last 21 months because of this devastating 203K loan process. This has been a XXXX situation for my family paying mortgage for a house that was not constructed and living in pathetic and unhealthy environment for 18 months. 
Thank you XXXX XXXX