Consumer complaint received 2020-12-14
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: KEYCORP (NY)

The closing documents for my mortgage state that PMI may be removed from my loan when the loan to value ratio drops below 80 %. 

In XXXX / XX/XX/2020 I inquired with Key Bank what options were available to me to remove PMI from my mortgage loan. The value of homes in my area had gone up substantially in my area likely making the loan to value requirements met by that alone. I discussed my options with a Key Bank representative and was told this was handled by one department that was not customer facing and the only way to determine what options were available was to mail them a letter with my request. 

I wrote the letter to the requested department and detailed possible options that would satisfy the loan to value requirement of 80 % documented in my closing documents. My suggestions included just removing the PMI knowing values had gone up, having the property formally re-appraised at either my or Key 's expense, making additional principal payments, or some combination of the these. 

I received a response letter in XXXX stating simply my PMI removal was declined with not further information about why or what other options might be applicable. 
I reached out to Key again to see why I had not gotten a reason as to why PMI removal was declined and why they had not provided details on any removal options I had suggested. The Key Bank rep proceeded to tell me my options made sense but in fact the loan to value ratio could now be 70 %. I pressed the representative on this as it conflicted with my closing documents and they said their document team would review and get back to me. 

A few weeks later I received a letter from Key stating the obvious that my loan to value ratio for PMI removal was 80 % and providing more detailed number. Again no mention of any of the other options for PMI removal. I knew they were viable options but it was clear Key did not want to work with me on this so I continued down the pay down path. Over the next 2-3 months I paid the principal on my loan down below the required ratio of 80 %. By the end of XXXX my loan balance was {$100000.00}. This was confirmed on my XX/XX/XXXX statement balance. My original assessment was for {$130000.00}, putting me at a loan to value ratio of roughly 79.8 %. 

In late XXXX I contacted Key Bank again and requested my options be laid out for removing the PMI as I had fulfilled the requirements they set out for me. I was again instructed to write a letter to the requested department. I did so. 

Today XX/XX/XXXX I received the response, again I was denied for insufficient loan to value ratio. I of course called Key Bank looking for an explanation as all of this had already been worked out months ago and I was simply fulfilling the requirements they said needed to be met. The first representative I spoke with was very unhelpful and suggested that some amount of interest on the loan made it appear to be over the ratio and my only recourse would be to contact the department again and wait another two weeks for a response. I informed him I thought it was poor customer service at this point to string this along for going on 6 months and then deny it again with little explanation. 

I took a few minutes to research my options and what he had said and realized my XX/XX/XXXX statement had the correct loan to value ratio so his response did not make sense. I called back and got extremely lucky to finally find a customer service representative who was willing to really help. She quickly realized there must be a miscommunication and got in touch with the department Im not allowed to talk to that handles all of this. After some back and forth the person who denied my request told her my loan to value ratio needed to be 70 %. I informed her that I had already taken care of this matter back in XXXX and Key Bank had researched the issue and sent a letter stating that the correct value was 80 %. I also reminded her that the original loan documents that I signed also say 80 % and Key Bank is bound by that contract. Unfortunately again my only course of action was to write the department again. 

At this point I feel Key Bank is not operating in good faith and is purposefully trying to make it excessively difficult to impossible for me to remove the PMI payment as required in the loan documents.