Consumer complaint received 2021-03-07
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: NAVY FEDERAL CREDIT UNION (FL)

In early XX/XX/2021, my wife and I decided to purchase a second home. Were were pre-approved by three lenders. Navy Federal Credit Union. XXXX XXXX. And XXXX XXXX. We submitted substantial information to receive these pre approvals including a complete schedule of all property owned that showed that in addition to our main home and an existing second home to be replaced by this new purchase. we also owned four rental property free and clear with no mortgages. 

We decided to go with Navy Federal ( NFCU ) having been a customer since my days at the XXXX XXXX. We went under contract on a property located at XXXX XXXX, FL. We were quite happy when NFCU matched the loan terms offered by XXXX XXXX and we locked in a 2.6 % mortgage rate with 25 % down on a 30 year conventional mortgage. Our closing date was set for XX/XX/2021. 

Our appraisal came back at more than the asking price and with excellent credit and all documentation submitted, our loan went to final underwriting on XX/XX/XXXX. We even communicated with the seller thinking we might be able to close early. 

Late in the day,. I was called and told there was a problem, Our current second home at that time, which we have since converted to a rental due to the purchase of this new second home also had a loan with NFCU. I was told we can only have one second home loan and therefore, they need to switch our loan to an investment loan with much worse terms. 

Fortunately, I am in a position where I can pay off that existing loan and own the home free and clear. I told NFCU I will pay off that existing loan and then we can proceed. I was told this should be okay but to hold off on paying it off. While I didn't want to pay off the existing loan, I understood the concern and was relieved that I am fortunate enough to do this. 

At this point. NCFU pretty much stopped communicating. The last word on Friday XX/XX/XXXX was that we should be good and our loan was going back to underwriting. At that point, our processor went on vacation. The next Monday was a bank holiday and then repeated attempts to get an update by both myself and our real estate agent were met with silence or being told to be patient. 

On Friday evening XX/XX/XXXX, with still no understanding of whether we were cleared to close and confusion around why there was no information since we were ready to address the concern raised,. I sent a direct message to NFCU on twitter asking for help. I received a call right away from a supervisor who looked into our file and told me things seems all set and we should be fine. I felt better over the weekend since we were now only four business days away from our closing. 

Mid day on Monday XX/XX/XXXX. I received a phone call from my loan officer 's supervisor and I was informed that they were not going to write the loan unless I switched to an investment loan with much worse terms. I was incredulous since in XXXX, we were pre approved by three banks., but now with four days until closing, we were backed into a corner and had no choice in the matter. I thought there was a misunderstanding and I explained to this loan officer that I have enough cash in my NFCU account to pay off the existing loan and close on the new loan. She told me that wasn't the problem The problem was that we owned rentals and they decided we were investors and were not really buying a second home. 

NFCU new about all of our properties in XXXX and could have raised this concern in the pre-approval process. They could have also raised in at any time along the way. Instead, they waited until we were three days from closing and at risk of losing our binder deposit and possibly being sued by the seller. 

So we proceeded ahead with a 15 year loan at 3.325 % instead of the original 2.6 % for 30 years. 

What's worse, is I now have an investment loan on my second home and a second home loan on a property that is now for rent. 

This is a classic bait and switch. They knew I was capable of paying the higher rate and they knew I had no choice but to take it. There is no reason this should have happened other than not working with me in good faith. It is inexcusable and I hate to think about what this would have done to a young XXXX couple buying their first home without the ability to do the things I am able to do later in life.