Consumer complaint received 2024-08-22
Product: Mortgage — Other type of mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: U.S. BANCORP (NY)

We opened a Construction to Permanent mortgage, which is a mortgage that provides funds for renovation on top of your regular mortgage. For the first 12 months, you pay interest only during construction, and after 12 months, your loan converts to a 30 year conventional mortgage. 
At the closing, and prior to closing, we were given closing disclosures that showed how much our interest-only payments would be for the first 1 year - it was clearly written that those interest-only payments would be {$2000.00} for year XXXX years XXXX, principal and interest would then become {$4900.00}. It also lists that until month XXXX, there is only interest payments with no principal payments and the loan can only adjust once in year one to {$4900.00} ( the full interest and principal amount, which is the conversion to the 30 year loan adjustment ). When you review the amortization schedule for the whole loan they provided by month, it lists {$2000.00} for the first 11 months, and the first change in payment occurring at month 12 to {$4900.00}. 
You can imagine when we received our XX/XX/XXXX bill after closing that, to our surprise, our interest payment had increased from {$2000.00} to {$3000.00}. I asked the bank why this change, and they claimed that hidden in the paperwork somewhere, we signed something saying that interest would increase as we drew funds from the construction loan.If this is the case, why not write this into the Closing Disclosure? The bank claimed that the disclosures are written by a computer and that they do not include these things in Closing Disclosures for construction loans. That is wrong, whether it is their policy or not - all terms should be listed in a Closing Disclosure- it is the purpose of them.

I do not see this as operating with the consumer 's best intentions and is exploitative, and unfair innature, The closing disclosure is supposed to disclose everything, and is not a robotic document- it is the bank 's responsibility to disclose everything the consumer should know so that they are not blindsided. My husband, myself, AND our lawyer were entirely unaware of this discrepancy, and our lawyer suggested we reach out to the CFPB after the construction loan converted to try and recover all the funds we overpaid beyond the {$2000.00} each month.We based our ability to afford the construction phase of the loan on what the bank disclosed to us in the initial closing disclosures all along. For them to make these adjustments and changes- citing some buried language, is exploitative.The full list of payments we made is below. I will also attach all documentation. In 11 months, we paid {$41000.00} in interest when we should have paid {$22000.00}. That is a difference of $ XXXX 've tried to work with the bank to discuss this problem, but they have removed themselves from all wrongdoing in this case. I do not know what else we can do in this scenario other than to reach out to the CFPB, which can demand the bank admit fault for blatantly including loan payment term errors and omitting critical information in the Closing Disclosure ; and return us these funds because they were clearly exploiting us. 
XX/XX/XXXX - {$2200.00} - overpaid by {$220.00}, XX/XX/XXXX - {$3400.00} - overpaid by {$1300.00}, XX/XX/XXXX - {$3100.00} - overpaid by {$1000.00}, XX/XX/XXXX - {$3600.00} - overpaid by {$1500.00}, XX/XX/XXXX - {$3700.00} - overpaid by {$1600.00}, XX/XX/XXXX - {$3700.00} - overpaid by {$1600.00}, XX/XX/XXXX - {$4100.00} - overpaid by {$2000.00}, XX/XX/XXXX - {$3900.00} - overpaid by {$1900.00}, XX/XX/XXXX - {$3600.00} - overpaid by {$1500.00}, XX/XX/XXXX - {$4100.00} - overpaid by {$2000.00}, XX/XX/XXXX - {$5800.00} - overpaid by {$3800.00}