Consumer complaint received 2024-06-11
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — Confusing or misleading advertising or marketing
Company: Better Mortgage, Inc. (IL)

On XX/XX/XXXX, I applied for a Home Equity Line of Credit ( HELOC ) from Better Mortgage through their online portal on the company 's website. Better claims to have a 100 % online process without any impact to a credit score because they use a " soft credit '' check. When prompted, I entered all required information including name, address, estimated home value, income, etc. I also answered qualifying questions such as whether or not I filed bankruptcy within the past 7 years and if I had any foreclosures, etc. Since I had filed bankruptcy within the past XXXX  years in XXXX, I answered the question truthfully. I as notified that a " soft credit '' check would be done during this prequalification process. After all the online questions were answered and the soft credit check was performed, I received an initial response from Better Mortgage that I was approved for a " pre-qualification '' for a HELOC and/or Home Equity Loan. I was presented on screen the option to choose between the HELOC and Home Equity Loan. Both options were presented in a side-by-side comparison to show the items like loan amount, payment terms, etc. I chose the HELOC option and then I was instructed to go to the next steps to allow for a " hard credit ''. The hard credit check was confirmed and I received notifications from XXXX and XXXX that my credit had been pulled from Better Mortgage. 

I was notified on screen ( via pop-up window ) from Better Mortgage 's online portal that I was also approved to expedite my underwriting approval process by submitting all required documentation ( i.e. paystubs, W-2s, tax returns, and other documents ) within the next XXXX window and I can lock in the rate that was provided to me in my side-by-side comparison. Also, this expedited process would mean that I would receive a final approval within XXXX hours after submitting all the required documentation. So, I decided to enter the next phase by submitting all required documentation and it was done all through the company 's online portal driven by a question menu. I answered all questions and submitted documents including my XXXX Bankruptcy dismissal order and I also provided an explanation as to the circumstances surrounding the bankruptcy. I provided a written explanation that said that I had filed bankruptcy XXXX XXXX in XX/XX/XXXX due to under and unemployment at that time but subsequently found a job and then requested the court to withdraw/dismiss the case. The court granted the dismissal and I also provided the official dismissal order as requested by the menu of questions in Better Mortgage 's online portal. Also, I noticed several documents requests ( i.e. relating to income such as W-2s, paystubs, tax returns ) all disappeared from the question menu and noted as " completed. '' I tried calling the phone number provided and subsequently received a denial letter ( Adverse Action Letter ) stating that I needed to have my bankruptcy increase the time since bankruptcy from 0 to 24 months. I called the number again and someone picked the phone and initially stated that my bankruptcy needed to be at least 4 years or more old and when I indicated that it is XXXX XXXX XXXX from filing and XXXX  years from dismissal and I explained that I never completed the bankruptcy but rather voluntarily had it dismissed instead, the Better Mortgage rep said that he had to check with his supervisor to double check how many years does the bankruptcy need to be aged on your credit report. He returned and told me that he confirmed that the bankruptcy needs to age at least 7 years after discharge/dismissal. He said that my loan representative would contact me later to better explain. 

At XXXX, I received a call from the loan XXXX ( XXXX XXXX XXXX XXXX # XXXX ) and he repeated the same information that my bankruptcy should be at least XXXX XXXX XXXX from the time of discharge/dismissal. When I asked him why was prequalified and preapproved knowing that I answered this question upfront and why did your company do a hard pull credit check that could potentially negatively impact my credit scores. He said that its " hard stop '' in the process if my bankruptcy was less than XXXX XXXX XXXX and if I had spoken to someone that may be they would have caught it instead. I told him that your entire process is 100 % online and I answered all questions correctly and honestly and that if I had known that my bankruptcy 6 years ago would have caused an automatic denial, then I would not have provided permission for Better Mortgage to do a " hard pull '' on my credit. He said that he was sorry and that there decision was a hard no given the information even after I explained that I had voluntarily requested to have my bankruptcy case dismissed and provided proof of the dismissal order. He said that there was nothing that he could do at this point.

So, I feel that the 100 % online process is deceiving because I find it difficult to believe that their digital process was not able to calculate or detect the age of my bankruptcy when I provided all the details clearly upfront before the " hard credit pull '' as was required by their online portal/digital system. Also, I would not have agreed to a " hard pull '' on my credit bureaus if I knew I did not qualify. I think this company sucks consumers into their 100 % online process, blindly provide a " prequalification '' and then strongly asks your permission for a " hard credit pull ''. Even with that, their online portal and digital system generated a " pre-approval '' letter confirming that I have been pre-approved. Furthermore, they want you to move fast and dangle a rate lock in front of you so long as you submit all required documents within a XXXX hour window. 

I think this company has deceptive practices that force or entice consumers to move quickly when in fact, they are providing false prequalifications and preapprovals as in my case. I am sure I am not the only consumer this has happened to and I would like the CFPB to investigate further into these unfair deceptive practices by the 100 % fast approvals from Better Mortgage. Furthermore, I want the Company to remove the " hard inquiries '' from all my credit bureau reports to put me back in the same place where I was prior to the hard pulls. If I am subsequently denied by another lender because of too many inquiries or if my score takes a hit due to their actions, then I want to also seek financial damages.