Consumer complaint received 2021-06-22
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: KEYCORP (OH)

On XX/XX/2021 I worked with KeyBank to pursue a mortgage on a property that I was interested in purchasing through their Key Communities program. This would be my first time purchasing a home and my father had assisted me with paying the earnest deposit on the property. The KeyBank representative stated that my father would need to provide two months of bank statements in addition to a gift letter in order to source the earnest deposit. My father had privacy concerns about KeyBank requesting his financial documents because he was not pursuing financing on the home. My father conversed with the representative who told him my application would be denied without my father 's gift letter and bank statements. My father let the representative know that he would not be providing the requested documents. 

After conversing with my father, the KeyBank representative reached out to me on XX/XX/XXXX with an ultimatum. I would need to provide my father 's financial documentation or I would need to request that the builder refund the earnest deposit to my father and fund the deposit myself. I reached back out to the representative letting him know that I would not be able to fund the earnest deposit myself and that I could not produce financial documents from my father. I received a follow up letter from KeyBank stating that upon my request, my mortgage application had been withdrawn. I followed up with the representative letting him know that I did not request to have my application withdrawn and that if KeyBank was unable to proceed with my mortgage application, I would need a letter stating that I had been declined because I was not able to provide the requested documentation that KeyBank was asking for to proceed with their application process. The representative informed me that he would work with his manager to amend the letter. 

I received an email back from the representative on XX/XX/XXXX stating that while he and his manager were working to get a decline letter, they found that they have a policy where my loan would not be declined due to not being sent to an underwriter. He stated that in order to send my file to underwriting that I would have had to pay a {$500.00} non-refundable deposit to KeyBank and underwriting would consider my application without my fathers deposit, an option that was not presented in the earlier communication. This put me in a situation where the builder I was working with claimed that I was in breach of contract due to not making a good faith effort to finance the purchase. The representative recommended that I try another financial institution which was discouraging and reminiscent of the discriminatory practices my grandparents faced when trying to purchase their home. 

This situation has led to the builder that I was working with refusing to refund my earnest deposit because without a letter or statement from KeyBank, the builder argues that I did not make a good faith effort to pursue financing on the property. This is false, I have provided KeyBank with all information that I am able to produce but due to KeyBank requiring bank statements from my father I can not complete their application and due to KeyBank withdrawing my application, the builder is refusing to refund the earnest deposit.