Consumer complaint received 2023-03-09
Product: Mortgage — Other type of mortgage
Issue: Closing on a mortgage — 
Company: GATEWAY FIRST BANK (TN)

We started a construction loan in XXXX presenting the amount the builder told us was needed to build, XXXX. We later found out that the builder, XXXX XXXX, was not licensed and lowballed the amount it would cost to build. The loan originator, XXXX XXXX, and the mortgage company where she worked, Gateway Mortgage, allowed us to continue by keeping information from us about the builder not having a license, and we believe that there was a breach of confidentiality, a conflict of interest and deception by the mortgage company and the loan originator to keep our business. XXXX XXXX and Gateway Mortgage company knew that the builder did not have a license and we have an email that was given to us by the State of Tennessee where XXXX XXXX and the construction loan manager, XXXX XXXX discussed this. They did not tell us any of this. The mortgage broker was also the builders girlfriend which we also found out later. That is where the confidentiality and the conflict of interest comes in. We did not know any of this until the builder quit after the bank told him to stop building because he went way over budget on the partially built foundation. We looked for new builders, but their quotes were anywhere from XXXX more than what the builder told us it would cost to build. That is when we figured out that he had low-balled the cost to build. We were told by Gateway Mortgage that we would have to build it ourselves. My husband and I work full-time and have zero experience with building and we are not from the area. We did manage to get the house built, doing a lot of the work ourselves and using subcontractors, but not for the original amount we were given by Gateway Mortgage. The only reason we found out about all of this was the housing inspector for the State of Tennessee told us that the builder did not have a license and that we should turn him in. We turned him in to the State of Tennessee. The builder presented the email string between our XXXX XXXX and XXXX XXXX as part of his defense to prove that the bank knew and he didnt do anything wrong. Fast forward to now. We are XXXX over budget, not including about XXXX of our own money, and instead of having a 2.4 % interest rate and an affordable payment, we are left with yet another refinance of the construction loan ( this makes the 2nd ), another XXXX in closing fees ( this makes the 3rd and a total of about XXXX ) and we are looking at a 6.7 % + interest rate and a payment of XXXX which is something we are not sure we can even afford. We are both in our 50s and this was our first home. We would have never even took out the loan in the first place if we would have been told that XXXX XXXX did not have a license to build, that he was dating XXXX XXXX and that he lied about the cost to build so that we would let him be the builder and not look at other builders. Since then, XXXX XXXX has moved on and works for another mortgage company. We are at the pint now where we have to close on our construction loan with Gateway and we have to do a refinance because of the new interest rates. Gateway Mortgage did not tell us that we could look for other financing until we asked. There is more to the story. There are facts about the appraiser/appraisals that have been ordered by Gateway. Its supposed to be random and anonymous, but we have somehow had the same appraiser every time that we have had to get a new appraisal. He always uses comps that makes the appraisal come in too low, and then changes his comps and somehow comes in at the exact amount needed. We are about to close on the construction loan and refinance again. We have already heard from the same appraiser once again. So, since we had the same guy in the past, we are worried that he will do the same thing again. Come in too low and we wont be able to come up with the money that we need to complete the loan. At that point, we are afraid that we will have to default on the loan and lose the house that we have put so much into.