Consumer complaint received 2021-01-13
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: Republic State Mortgage Co. (TX)

Republic State Mortgage never set expectations of how long this process would take which has caused me stress. They have been difficult to speak with ( Email communications take several days and calls are not returned ) ; this has caused an unnecessarily prolonged process. They have been unprofessional in communicating the documents needed by not requesting documents all at once, but rather randomly throughout the process. They have been misleading with the costs of this refinance and are not willing to explain certain costs associated with my escrow. 
XXXX I spoke with XXXX about starting the refinance process. He informed that it will be at no cost to me as there will be a lender credit and a simple process with no application fees. He also states that the escrow account will be rolled over seamlessly and not have to be re-funded. 
XXXX I began the process of a refinance by registering online with RSM and sending via email a payoff demand statement as requested. 
XXXX I was asked for a copy of my homeowners policy and immediately sent a copy of my homeowners policy. I was told via email : I am sorry this has taken a few days longer than normal. The last thing I need that XXXX has yet to provide is your current home insurance. Usually, that is an easy thing to get from the existing servicer, but not this time. If you have a copy of your current home insurance policy or know the premium and when it renews every year that will help me finish this up for you. I know I can save you some money. Once we get these details all worked out the process will go very quickly. 
XXXX Received the ALCI ( attached ) and the Refinance Estimate via email. I was told via email : Thanks for your patients on this. I think the best option I have to limit your closing costs is this. Your current payoff is attached that we received from XXXX. The payoff amount is {$150000.00}. The new loan amount would be {$150000.00}. You will need {$0.00} at closing at an interest rate of 3.5 %. You will also skip your XXXX payment if we close by the end of XXXX or early XXXX. That will make up for the increased loan amount of {$880.00}. The savings by skipping a payment is {$1300.00} currently. Let me know what you think. '' XXXX I asked if there are any out of pocket fees. I was informed of the appraisal fee : The only thing you need to pay up front is the appraisal fee. I included that fee in the estimate I sent you. Once you pay it we will reduce the new loan amount accordingly. Basically, your loan amount would go down from {$150000.00} to {$150000.00}. Does that make sense? 
XXXX After reviewing the ALCI, there is a {$4700.00} closing cost included. I ask if this amount will be rolled into the loan. I was informed, You will only borrower {$150000.00}. There are closing costs, but we are giving you a lender credit to cover the majority of the costs. Thats why your loan amount is only going up by a few hundred dollars. The lender credit covers most of the cost. 
XXXX - I respond : Great! So there is {$0.00} paid out of pocket from me? The new loan amount will be {$150000.00}? Sounds too good to be true! Also, I dont know if it matters, but I have flood insurance for {$50.00} a month. So my monthly payment is closer to {$1100.00} a month. What is the next step? 
I didnt receive a response to this. 
XX/XX/XXXX I was asked to provide a copy of the flood insurance policy. I emailed it to XXXX the same day. 
XX/XX/XXXX I was sent disclosures that includes the added flood policy with the following email : Attached is the updated Loan Estimate that includes the flood insurance you provided me. The loan amount will remain {$150000.00} because you will be required to pay the {$470.00} appraisal fee up front. This estimate is assuming you have paid for the appraisal in advance. The flood insurance you sent me expired in XX/XX/XXXX. I went ahead and used the premium you provided. It increased a little bit we will update that when we get the binder from the insurance agent. Let me know if this works and you want to move forward. 
XX/XX/XXXX I signed the disclosures : I believe I have finished signing all documents. Once I pay the appraisal fee the new loan amount will be {$150000.00}, right? Please let me know if I missed something. Also, am I required to get new flood insurance? If so, by when? Additionally, what will be the closing schedule if I would like to skip two months of payments? 
XX/XX/XXXX - He responded, No. The loan amount is going to stay at {$150000.00}. I already accounted for you paying the appraisal fee up front. Well just get updated information for your current flood insurance policy. You dont have to get anything new. It will depend on when we get the appraisal on when we can close. Well get an updated payoff. You can skip two payments. That might change the loan amount a little bit because there will be more interest required from your current servicer. I can let you know how that would look when we get a little closer. 
XX/XX/XXXX I was introduced to the underwriter, XXXX XXXX, to collect my appraisal payment. 

XXXX Paid the {$470.00} appraisal fee out of pocket and was notified that my file was submitted to underwriting XX/XX/XXXX Appraisal was completed and came back at {$180000.00}. 

XX/XX/XXXX I was advised of conditional approval. 

XX/XX/XXXX I was asked to clarify and collect 6 items to proceed. 

XX/XX/XXXX All requested information was sent to the underwriter via email. 

XXXX I was informed that all figures need to be reworked due to low appraisal XXXX I called the office for an update and was advised that XXXX is more responsive through text message. I texted him asking if I should make the XXXX payment. He responded : I am working on options for you this morning. I think well be able to work it out. Ill be in touch with you today. I think we can get it done in time for you to not make your XXXX payment. 

I never received a call or any communication from XXXX. 

XXXX I texted XXXX once more to ask if I should make the XXXX payment. He responded : I will call you with some direction today. I am finishing up a meeting and will call you after. 

XXXX - By XXXX in the evening, I texted XXXX : Is now a good time for a call? 

XXXX - He responded : Lets do tomorrow morning. Ill call you. 

I never received a call or any communication from XXXX, instead I called the underwriter who told me that she will talk with him for me. 

XX/XX/XXXX XXXX texted me : Let me know once you make the payment. I would like to get an updated payoff and escrow balance so we can get everything set up accurately. We will get this done on XXXX. 

XX/XX/XXXX Underwriter asked for me to have the home insurance policy updated to reflect RSM as the lender. 

XX/XX/XXXX I called and had the home insurance policy updated to reflect RSM as the lender. 

XX/XX/XXXX I asked the underwriter if we are closing soon or if I should I make the XXXX payment : She replied : I will ask XXXX about the closing date tomorrow once he makes it in to the office. I also texted XXXX for an update in which he responded that he is out of the office. 

XX/XX/XXXX I texted XXXX as advised by the underwriter to find out the closing date. 

XX/XX/XXXX XXXX responded : I am working on finalizing everything today. 

XXXX I texted XXXX asking if there is anything needed to close by the XXXX. 

XXXX XXXX responded : We just need to get it finished. It is my goal this morning to finalize it for underwriting. Ill get back with you today. 

I never received a follow up from XXXX. 

XX/XX/XXXX I texted XXXX to inform him that Ive made the XXXX payment and asked if we can close by months end. Additionally, I asked if I am eligible for a 3.125 % rate as opposed to the 3.5 % that was industry standard when I started the process in XXXX because another company reached out me with the lower rate. 

XX/XX/XXXX He responded : Do you want to roll in those costs? I dont see how they can pay your closing costs and give you a 3.125 % rate. Ill work up the best option we have and send it over to you. Im having a hard time paying for everything with the short appraisal at 3.5 % XX/XX/XXXX I received the final disclosure and was advised that I needed proof of a flood policy since the current one expires on XX/XX/XXXX. I was given a closing date of XXXX and took off work on that day. 

XXXX I called the underwriter to inform her that Ive taken off work on XXXX to close. She was optimistic that the loan would be complete by then. I found a new flood policy and was advised by underwriting to pay it out of pocket : Yes, you need to pay the premium out of pocket. As soon as you have the insurance, please send it to me. This is all I need to get your loan back in line for final review. 

XXXX - I responded : Would you happen to know why I have to pay the flood policy out of pocket? I thought that the escrow was established to pay for the policy. Is this the case for when its time to renew my homeowners insurance as well? 

XXXX Underwriters response to my email from XXXX : Please reach out to XXXX if you have any questions regarding the flood insurance. 

XXXX - My response : Will do, thank you. Would you happen to know if I will be able to skip 2 months of mortgage payments after closing? 

I texted XXXX as advised by the underwriter but got no response. 

XX/XX/XXXX After not getting a response from XXXX, I emailed the underwriter again for answers : Id like to keep you updated if thats okay. I also want to ensure that I am able to close on Friday as well as skip XXXX and XXXX payments. Is this possible? I believe the only hold up is XXXX at XXXX XXXX deciding not to process the payment when I gave her my card info 2 days ago, so If XXXX ( flood policy agent ) doesnt send you a declaration by Wednesday, XX/XX/XXXX I think I should be able to call customer service and request that any rep take the payment and send the declaration page to you. 
XX/XX/XXXX Underwriters response : I have requested the new payoff and escrow balance. What is the annual premium amount for flood so that I can add this information to the loan? When XXXX comes in the office, I will get with him to finalize the loan. Once I know what the final loan amount is, I will reach out to XXXX and get the flood insurance. You will need reach out to XXXX about skipping two months payments. I just pulled the " soft pull '' on your credit report and two accts that did not have a balance previously now have a balance. These accts need to be paid in full and full receipts need to be provided. The amounts are small but have made the debt to income ratios go up. XXXX XXXX XXXX and XXXX. Please send me the receipts. 
XX/XX/XXXX - I was finally contacted by the agent that wrote the flood policy and immediately emailed it to the underwriter. 
XX/XX/XXXX The accounts mentioned above have both been paid in full prior to her request for payment receipts, so I emailed the underwriter again for answers : XXXX is unresponsive to questions so if you could find out for me [ if I can skip 2 payments as promised on XX/XX/XXXX ] that would be great. I need to know if I should make a payment before the XXXX of this month ( because thats when the payment is considered late. I have never made a late mortgage payment before )? Seems like you guys wont be wrapping up this loan anytime soon. 
XX/XX/XXXX - I texted XXXX : Hi XXXX, should I make a payment before the XXXX? 
XX/XX/XXXX - He responded : I want to get this all closed. You will have a small late fee if the loan isnt paid by the XXXX, but it wont affect your credit as long as we pay the current loan off by XX/XX/XXXX. 
XX/XX/XXXX - I responded seeking clarification : Do you recommend that I pay on time or take the fee? 
XX/XX/XXXX - He responded : The fee will be included in your payoff. I would do that if you want to skip two payments. XXXX and I are getting everything ready to send back to underwriting now XX/XX/XXXX I received a phone call from the underwriter. She stated {$1400.00} would need to be presented at closing or can be rolled into the loan. I asked where this fee came from and she responded : Well, we have to get paid somehow. I reluctantly agreed to having it rolled into the loan. I was then emailed more final disclosures to sign. 
XX/XX/XXXX I did not sign the discloser showing a payment decrease of only {$110.00} and instead emailed my concerns to XXXX : My concern is the additional {$1400.00} that was added to the back of the loan yesterday. My payoff in XXXX was {$150000.00} and now it is {$150000.00}. There was a {$880.00} difference back in XXXX compared to the {$2900.00} difference now. The lender credit does not cover most of the cost anymore. 
XX/XX/XXXX - Additionally, I have over {$4400.00} in my existing escrow with XXXX, so I'm not clear on why this no-cost refinance has emptied my escrow balance to {$0.00}. I was told that the escrow would rollover seamlessly from XXXX and that there were sufficient funds in there to pay both my flood and home insurance ; however, I'm being asked to pay both my flood and home insurance out of pocket. I've become distrustful of this process and just seeking clarification. 

XX/XX/XXXX - He responded : We have extended the closing and your interest rate lock several times. Your credit score went down as well. We just took on those costs for you and didnt charge you. The appraisal is about to expire. I am just trying to get it done for you and help you. We cant pay anything else or waive anything else. If you would rather cancel the refinance I understand. Just let us know what you would like to do. We want what is best for you and never want any to think we are not trustworthy. 

XX/XX/XXXX I sought one-time legal advice from an attorney who confirmed my suspicions that companies will intentionally prolong the refinance to grow the deficit between the new loan amount and the payoff amount or simply add last minute costs to the loan. 

XX/XX/XXXX - I responded : The clarification that Im seeking is in regard to the escrow. Im under the impression that the {$4400.00} was going to rollover from lender to lender. Im just asking if its now going to be returned to me since you are asking for an additional {$1400.00} to be added to the loan. 

XX/XX/XXXX - He responded : The balance from your current escrow account is going to be applied to the new loan. You have to close by Tuesday in order to fund by XX/XX/XXXX. I honestly dont think that is possible now. We have to send you the Closing Disclosure to sign today for you to be eligible to close on Tuesday. I have an idea for what we should do to make this work. Are you available to discuss everything this afternoon? At this point I think you need to make your XXXX payment. 

XX/XX/XXXX - I responded : Sure, Im available anytime. 
XX/XX/XXXX - I also texted XXXX to refresh his memory that he was to call me a few hours later. 
I never received a call or any additional communications from RSM and it has now been 2 weeks.