Consumer complaint received 2024-10-11
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — Changes in loan terms during or after closing
Company: HUNTINGTON NATIONAL BANK, THE (OH)

Our family decided to build a house and the builder suggested we use XXXX from Huntington. During the initial meeting in XXXX with Huntington Representative, XXXX, we discussed our desire to waive escrow, it was made to seem like it would not be a problem. We discussed the nature of our income and that we receiveregular bolus payments and in an effort to bring our monthly payment down we would like to waive escrowand make the property tax payments and insurance payments.This was made to seem like it would be no problem. Hearing this we thought we had everything we wanted and the numbers made sense and we felt totally comfortable. 

Our initial loan disclosurescame in XXXX and did include escrow, this was explained to be just a rough draft and will change as the process goes on. 

Since this mortgage would be for a new build we were then offered the option to lock in our interest rate and asked we make a Rate Lock Deposit payment of {$5900.00}, which we did in XXXX. This was sold to us as a protective measure over the changing interest rate. 

With zero communication from XXXX between the months of XXXX and XXXX we think everything is moving smoothly. 

XX/XX/XXXX we get final pre-closing disclosures that include escrow, we reach out and ask for the Escrow to be waived, we are told that they can do it but now there would be a .25 % fee totalling {$2000.00}. 
We explained that this was not disclosed to us at any point previous, and when we went to shop around for another mortgage company Huntington told us they would not refund our Rate Lock Deposit, thus compelling us to move forward with them as our lenders under threat of loosing the {$5900.00}. 

XX/XX/XXXX, Huntington representative XXXX tells us that they will now not be able to waive escrow at all, which adds a cost of {$1200.00} per month. This is troubling for us since we explained the way our income works. 

Our broker made representations up until XX/XX/XXXX that we qualify for an escrow waiver when, in fact, we do not ( based on underwriting criteria or lender guidelines ), weconsiderthis a misrepresentation of loan terms. TILA requires that disclosures be accurate, and significant changes in these terms, such as being ineligible for an escrow waiver, should have been clearly communicated to us before making decisions like locking in an interest rate.

Material Changes in Loan Terms : Under Regulation Z, which implements TILA, lenders must disclose material changes in loan terms, especially before closing. If a promised featuresuch as an escrow waiverends up being denied, that could be a significant change, potentially affecting our monthly payments and total loan cost. 

The Ohio Homebuyer Protection Act adds further protectionOurmortgage broker misrepresented our eligibility for an escrow waiver or failed to disclose critical loan termssuch as fees, interest rates, or terms related to your rate lockthis could be a violation under the OHPA. Brokers are required to act in your best interest and provide full and accurate disclosures. Under OHPA, any deceptive, unfair, or misleading practices may lead to penalties for the broker and recourse for us as the borrower. In our case, our broker promised us an escrow waiver that underwriting later denied, this constitutes a misrepresentation if it was not properly qualified or contingent on underwriting approval.