Consumer complaint received 2019-08-02
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: RUSHMORE LOAN MANAGEMENT SERVICES LLC (NC)

Please refer to my XX/XX/XXXX complaint against XXXX XXXX XXXX ( XXXX ) and the successor complaint against Rushmore Loan Management ( XXXX ) filed in XX/XX/XXXX. A brief recap follows : I applied for and was approved for XXXX XXXX  special mortgage loan product called the XXXX XXXX XXXX. The amount of the mortgage was $ XXXX. This product was and is not a conforming mortgage ; it was directed at higher-credit customers. Terms were bi-weekly payments and a 5-year maturity. The rate was 2.55 % ; there was no index or margin disclosed. Beginning 6-months after the note date, XXXX  committed to renewing the loan for additional 5-year terms as long as we met credit criteria. The Rate Renewal states : I may request and receive a Rate Renewal beginning six months after the date of the Note, as long as I meet all the credit and eligibility requirements in effect at that time. The credit and eligibility requirements may change at any time without notice. I understand that I may not receive the Rate Renewal if I dont meet these requirements. A Rate Renewal would modify the Note so that : ( 1 ) The annual interest stated in Section 2 of the Note would change to the annual interest rate in effect for XXXX XXXX loans being offered to the general public at the time of the request ; and ( 2 ) The Maturity Date stated in Section 3 ( A ) of the Note would change to a date that is approximately 5 years after the effective date of the Rate Renewal. The charge for a renewal is 2 bi-weekly payments ( much lower than a refinance ). We indeed executed a rate renewal and paid the 2 bi-weekly payments in XX/XX/XXXX to execute the Rate Renewal at 3 %. ( Even though the rate was higher, a HELOC lender stipulated that we first renew the XXXX XXXX XXXX. ) XXXX XXXX executed the mortgage business in XXXX and our loan was purchased by Rushmore. I had serious concerns about Rushmores ability to properly service this nonconforming loan and I was correct. I filed a complaint requesting how Rushmore  was going to abide by XXXX XXXX original loan and rate renew commitments. Rushmore provided a response to the CFPB stating that Rushmore will be treating rate renewals as loan modifications, just as XXXX XXXX, XXXX. treated the last rate renewal in XX/XX/XXXX. The enclosed letter and Loan Modification Agreement state that if you want another rate change, you must request another Rate Renew. A fee is required if you renew your interest rate more than six ( 6 ) months from your New Maturity Date. Interest rates, eligibility requirements, and costs can change at any time. Enclosed is a Borrower Assistance Application, should you wish to apply for a loan modification. 

However, one would never know how Rushmore would actually execute on their end until we actually requested a rate renewal. A large part of my prior complaint was that XXXX XXXX had a proprietary pricing engine that provided rates much lower than market based on strong credit characteristics and the shorter duration of the mortgage. So given the precipitous drops in rate today, I determined that today would be a good day to pursue my rate renew option as promised in the response to me and the CFPB. 

My fears were realized. Their earlier letter stated they would be treating as a modification. They are treating this as a modification to a troubled borrower, not as the high credit product it is. Today they said the renew rate would be between 4 % - 4.5 %! This is preposterous and violates the letter and spirit of the original product. The 4.5 % rate quoted is 1.5 % HIGHER than the current 15-year rate of 3 %. As a frame of reference my February 2016 renewal was at 3 % and the 15-year rate at the time was 2.96 % ( I have provided web proof of these rates ).

I knew this was going to happen. Rushmore has no way of replicating XXXX XXXX proprietary pricing engine. Shame on everybody for not giving my first complaint due consideration. 

The proper remedy should be to permit my wife and I to rate renew for the contractual cost of two payments at a rate of about 3 % for another 5 years as permitted by my loan contract.