Consumer complaint received 2024-05-13
Product: Mortgage — VA mortgage
Issue: Closing on a mortgage — Delays with the closing process
Company: NAVY FEDERAL CREDIT UNION (CA)

We believe we are being discriminated against by Navy Federal Credit Union ( NFCU ) because they do not want an assumption of a VA Loan to take place. From the actions of NFCU, we perceive NFCU is doing everything they can to NOT allow the VA assumption to take place, to include actions as : Asking for the same documents over and over again ( wasting time and dragging out the process ), not asking for standard documents to be signed, asking for standard documents later in escrow ( which slows down the process ), not calling and/or communicating with what they need, asking for documents that dont exist repeatedly or asking about properties that we do not own and have never owned ( which waste time and seems like they are trying to find a reason to deny us this loan ) and continuing to push the time duration of how long the process will take with no reason as to why is takes longer ( first estimate was an additional 45 days to process the assumption, as of the week of XXXX XX/XX/2024 we are being told it is going to be an additional 15 days on top of the estimated 45 days, and as of XXXX XX/XX/2024 we are being told that if there is a clear to close it will take an additional XXXX  days to close ). All these actions are perceived to be purposeful and egregious in hopes that either the buyer or seller will back out of the deal. We perceive that NFCU is conducting these actions because NFCU does not make any additional money on the deal. They hope that customers open new mortgages as the average rate XXXX % percent that way they can make money and get rid of the lower mortgages at what we are trying to assume at XXXX XXXX. Overall, they are taking, what should be a standard entitlement to XXXX XXXX XXXX, and making it impossible to use or achieve. 
We believe this these actions are unfair, unreasonable, unethical, and discriminatory lending practices. 
BACKGROUND : I am XXXX XXXX XXXX with the California XXXX XXXX XXXX. I have served on XXXX orders for over XXXX  years. My wife, XXXX XXXX, is a XXXX XXXX XXXX and has been for the last XXXX  years. We are currently in XXXX California and have recently both received job transfers to XXXX California ( to be closer to her family ). My father-in-law has been a XXXX for the last XXXX years in the greater XXXX area. As soon as my wife and I found out about our potential job transfers, we started looking for homes with the help of my father-in-law. We found a home in XXXX XXXX, CA. ( link to the listing : XXXX XXXX XXXXXXXX ). After conducting more research, we found out the seller is a veteran and has a current mortgage as a VA loan through NFCU. My wife and I submitted an offer for the home on XXXX XX/XX/2024 for {$540000.00} ( {$15000.00} over asking price ) with the contingency to assume the VA loan that is currently on the home at 2.25 %. 
On XXXX XX/XX/2024 the offer was accepted and both parties agreed on a XXXX escrow ( estimated to close XXXX XXXX 2024 ). As soon as both parties were under contract the seller needed to contact NFCU to let them know that she is selling the home and is allowing an assumption to take place which will relieve her VA Loan entitlement from the mortgage, and attach my VA loan entitlement to the loan that already exists on the home ( VA 2.25 % ). Once NFCU was contacted NFCU agreed that the entitlement to conduct an assumption on a VA loan is available, and the seller conducted her paperwork to start the process. 
After a few weeks already in escrow, on XXXX XXXX 2024, NFCU notified me ( buyer ) and the seller that NFCU requires an additional 45 days in escrow to process the assumption. NFCU explained the process takes an additional 45 days because assumptions are completed by hand not using a computer or algorithm. Because of NFCU, the new close date for escrow is dated XXXX XX/XX/2024. 
At this point we have no choice, either comply with NFCU or lose the home. We ( buyer ) reached out to the seller to advise her on NFCUs requirement of XXXX additional days. The seller agreed to the terms to extend the time in escrow, but in exchange the seller required us ( buyer ) to cover her holding costs of {$67.00} per day each day we are in escrow exceeding the original close date of XXXX XXXX 2024. Again, we either had to comply with the terms or risk the seller backing out of the deal and XXXX ( buyer ) losing the home. 
It is now XXXX XX/XX/2024. NFCU still has not given us the clear to close. They will not give us a reason. We have given them every document they have asked for ( some even numerous times, giving the same document ) and have given these documents to NFCU within 24 hours each time they have requested something. I was supposed to hear back froma supervisor today XXXX XX/XX/2024 to get an answer on if we are closing, if we are approved, or an answer on anything. I called NFCU again at XXXX Pacific time to talk with a supervisor to get any answers and the person we spoke with in the assumptions department ( Grant ) said that he cant get a supervisor on the phone, and that one will contact me tomorrow before end of day, XXXX XX/XX/2024. Note : This is a constant MO ; I call to get answers, I dont get any. I ask for a supervisor, and they say they will contact me tomorrow. Its always tomorrow ; again, seeming they are doing this on purpose to drag this thing out, not resolving any issues, hoping that we will just walk away or the seller will back out and walk away. 
We are also perfect customers to buy a home. Our XXXX scores are above XXXX each. We have XXXX debt. No Car payments, no credit card debt ( paid off before the end of the month ), no student loan debt, and no medical debt. We have a great income combined, and even on an individual basis we should qualify for the loan. The loan remaining is only approx. {$350000.00}. We are putting a deposit down of difference between the offer price and the mortgage balance of approximately, approx. {$180000.00}. This loan is an assumption so that means the loan already exists, which should imply that all the lender needs to do is make sure that we can afford the loan. Our loan to value ratio is XXXX XXXX which far exceeds the national average when buying a home and far exceeds the standard XXXX XXXX when only putting XXXX XXXX down when buying a home. We have approximately a household gross income of {$20000.00} per month and a net income of {$14000.00}. 
There is no reason why it should take NFCU an additional 45 days to see if a customer qualifies for a loan that already exists at 2.25 % when NFCU can generate a new loan for a buyer a 7 % within 30 days or less. On top of on this, as of XXXX XX/XX/2024 NFCU claimed it is now taking an additional 15 days on top of the original 45 days they claimed, and even if we did have a clear to close it will take an additional 6 days on top of that to close. 
NFCU is not a new bank. NFCU is not a new lender. Assuming a VA loan is not a new entitlement. They claim they support the military. Yet they seem to be making it impossible to take advantage of the entitlement us service members ( myself and the seller ) have earned. 
If they can generate a new loan for a new customer who is only putting down a deposit of between 5-20 % and giving that loan out to a customer at 7 % interest within a standard XXXX escrow, they should easily be able to switch entitlements on a loan that already exists at 2.25 % within the same amount of time. There should be no reason why we are in escrow now for XXXX  days and counting. 
Again, we believe they are doing this on purpose. We believe NFCU is doing everything to run out the clock so they do not have to go through with the assumption. We believe they are doing this because they would rather a customer apply for a new mortgage at the current interest rates ( 6-7 % ) instead of assuming a loan that already exists at a historically low rate ( 2.25 % ).