Consumer complaint received 2021-10-23
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: GUARANTEED RATE INC. (TX)

After initially applying for a home loan, we were told that we needed to work on improving our credit in order to qualify. It was recommended by XXXX that we speak to XXXX as she was in charge of the credit program. 

- After speaking with XXXX, she informed us we needed to work on building our credit scores in order to qualify for an FHA loan. She recommended that we enlist the services of XXXX to repair and build our credit. 

- We were quoted a rate of {$380.00} per month ( {$190.00} each per month ) to begin building our credit. We expressed concern that we would be investing so much without a guarantee when there were other companies who offered similar or identical services for much less. We were then told that XXXX offered an incentive to customers who used XXXX that could be used in the design studio once approved for a home loan. We were told that it would take approximately six months to repair our credit, and our DTI is good. While still doubtful due to the cost, we were reassured by XXXX at XXXX that our scores would get to the level needed in six months. 

- Based on that information, we began looking at XXXX XXXX neighborhoods around the XXXX XXXX area. We found a neighborhood that we felt met our needs and would fall within our budget, toured the models, and the subdivision. We were told that the approximate build time for houses to be completed in this neighborhood was around nine months. In addition, they had a limited number of lots that had a {$0.00} lot premium versus the standard around $ XXXX {$8000.00}. 

- After that, we reached out to XXXX again to inquire whether she was certain that we would be able to be approved after six months and whether we could put earnest money down to secure a lot. During multiple conversations with XXXX and XXXX, we were reassured that the XXXX process would work and that we would be good to move forward. 

- Based on the replies, we signed a contract and paid the {$500.00} of earnest money to secure the lot along with securing other incentives currently in place ( money toward closing costs, money at design studio, money toward title fees, etc. ). 

- The next day, XXXX reached out to us to confirm that we did go forward with the putting down the earnest money and asked if we did another application. We informed her that we had. She said she would reach out to XXXX so we didnt have another pull since that had already been done prior to signing up with XXXX. Again, we were reassured by multiple people that we would be able to qualify for a home loan through this program. 

- Shortly after this, we were contacted by a XXXX XXXX representative from the neighborhood we selected who told us they didnt think they would be able to hold the lot because we didnt have a fully approved loan and would likely have to refund us our earnest money. After explaining the above situation, he informed us he would be taking the situation to his supervisor ( XXXX XXXX ) to see what could be done. 

- During our conversation on XX/XX/2021 with XXXX, we were informed : o That XXXX couldnt secure the lot for us and would be refunding the earnest money o That XXXX was not an employee of XXXX even though she has a XXXX email address o That the housing market was stabilizing, and we shouldnt see too much in the form of housing appreciation o That XXXX couldnt do a XXXX because there was too much risk in the pricing volatility of the housing market also a 30 day vs 6 month approval. 

o He could not guarantee : That there would be lots with a {$0.00} premium That we could receive the current incentives after six months if we were to reapply ( closing cost contributions, title cost contributions, design center cost contributions, etc. ) o XXXX can be done if a borrower is around XXXX ( XXXX has a score of XXXX ) o He would speak to his District sales manager about the situation - Based on the above, there is the potential of material financial harm to us due to the misinformation provided in the form of : o Being forced to spend additional money for a lot premium o Increase closing costs due to loss of incentives o Increased title fees due to loss of incentives o Decreased purchasing power at design studio due to loss of incentives o Increased lot premium due to price fluctuations o Increase in overall cost of home