Consumer complaint received 2021-03-23
Product: Mortgage — Conventional home mortgage
Issue: Closing on a mortgage — 
Company: CIT BANK, NATIONAL ASSOCIATION (CA)

I recently closed a home mortgage with CIT Bank. On the day prior to the scheduled closing, CIT pulled a " bait and switch '' and told me my rate was increasing by 0.20 %. We were already late to close and the seller was getting impatient. I did not have the time to fully vet the issue with CIT and fight their unjustified rate increase, but was able to scramble to provide additional support requested to reduce the increase to 0.10 %. 

In summary, at the last minute, CIT determined I did not comply with a Rate Discount Agreement ( " RDA '' ) ( attached ) that was agreed to, however, their reasoning was not supported by the agreement. Under the Discount Offer Disclosures section of the RDA, it is clear that to qualify for a 0.10 % discount on a stated loan rate, I must deposit new funds ( 10 % of loan amout ) in a CIT account and the funds can not be used for down payment or funds to close. However, this requirement is not included in the section to qualify for a 0.20 % rate reduction which required a deposit of 25 % of the loan amount. In accordance with the agreement, I deposited the required funds ( 25 % of loan amount ) in a CIT account to qualify for the 0.20 % discount. These funds were used for closing, which created a sudden issue, as CIT notified me for the first time that these funds were not allowed to be used for closing, even though this was not disclosed in signed documents. 

To provide some history regarding correspondence with CIT during my loan process, the below provides context for CIT 's unethical behavior and why I believe my loan rate should be corrected. 

I initiated the loan process with CIT 's Loan Officer, XXXX XXXX ( " XXXX  '' ), during a phone conversation on XX/XX/XXXX. Below are some key communication points, the majority of which are in email, around our rate and process. I can provide supporting documentation if helpful. 

XX/XX/XXXX @ XXXX - XXXX noted disclosures are being released and summarized the rate discount opportunity. There was no mention of the 25 % deposit not being used for closing. 

XX/XX/XXXX @ XXXX - I asked XXXX  " We'll be able to deposit 25 % into our CIT account for the .20 discount. Does the agreement need to be amended? '' XX/XX/XXXX @ XXXX - I never heard back from XXXX so asked for her to get back to me. 

XX/XX/XXXX @ XXXX - Regarding the rate reduction agreement, XXXX instructed me to " Sign the initial set of disclosure showing the base rate. We will re-disclose the lower rate as youve requested and send a second set next week showing the lowered rate ( 2.475 % ). '' Note the RDA at that point did not include any rate reduction, which is what I was trying to clarify. I also never received an updated RDA, only subsequent Closing Disclosures and emails stating the 2.475 % rate. That being said, I never signed anything regarding my rate including a rate reduction other than the Closing Disclosures. 

XX/XX/XXXX - My wife and I signed the RDA. 

XX/XX/XXXX @ XXXX - I asked XXXX " Can you please get back to me regarding the {$610000.00} deposit process ( current account vs. new account ) and also confirm to XXXX XXXX ( " XXXX  '' ), one of XXXX XXXX colleagues, the XXXX ARM product ( 2.675 % less 0.20 % = 2.475 % ) that we qualify for once I send over the lease support? '' ( Please note the referenced lease support was a lease agreement I needed to provide in connection with supporting rental income. ) XX/XX/XXXX @ XXXX - XXXX responded with " Yes, the deposit would by {$610000.00}. XXXX IO banking relationship rate ( 25 % of loan amount deposit ) would be 2.475 %. Please submit the lease agreement and proof of initial deposit so XXXX  can add this information to the loan file. Once received Ill updated the file to XXXX ARM IO. '' XX/XX/XXXX @ XXXX - I asked XXXX XXXX Can the {$610000.00} go to my current CIT account? '' XX/XX/XXXX @ XXXX - Carles XXXX with " Yes, you can deposit into your current account. '' ( There was still no disclosure that the funds can not be used for closing. ) XX/XX/XXXX @ XXXX - I emailed evidence of the amount deposited to XXXX  and XXXX. 

XX/XX/XXXX @ XXXX - XXXX emailed XXXX  " The borrower is leasing the existing after the sale. Can you confirm the lease of XXXX is in the file? Ill need to updated the loan program to XXXX IO ARM. '' XX/XX/XXXX @ XXXX - XXXX  emailed " Youve been wonderful in getting us what we need so we should be in great shape. '' The next substantive communication started Friday ( XX/XX/XXXX ) afternoon when XXXX asked me to call her regarding a loan qualification issue. I spoke to XXXX a few times that Friday afternoon and sent over information to support my qualifications for my loan program. XXXX and I also spoke Saturday ( XX/XX/XXXX ) morning, and XXXX  told me the file looks good and she thinks we can finalize it on Monday. She noted that she was not able to put that in an email, but also did not note any issues with exceptions, approvals needed, or rate issues. 

The loan process progressed, final documents were circulated and executed/notarized on Wednesday XX/XX/XXXX, and we were scheduled to close on Monday XX/XX/XXXX. However, I received a call on XX/XX/XXXX from CIT of this new rate issue and notification that closing will not proceed as scheduled. During a conversation with XXXX  on XX/XX/XXXX and her supervisor XXXX XXXX ( " XXXX '' ) on XX/XX/XXXX, I was essentially extorted and told my rate was increasing. This is when I was also notified of the requirement for the 25 % new deposit to remain in the account even though there was no requirement of such in the documentation I had executed. 

I was able to deposit the 10 % of the loan amount to get the 0.10 % rate reduction, but this last-minute bait and switch tactic cost me closing delays and continues to cost me {$200.00} per month in mortgage interest. 

Further, when dealing with XXXX  at the end of the loan process, he acknowledged there should be more disclosure around the deposit requirements, and subsequent to my loan he had XXXX  add specific disclosures to her email signature that states " Relationship Benefits Further reduce your mortgage rate with the following discounts : ( new deposits can not be used for down payment or closing cost and must be in the account post-closing ) .10 % rate discount with 10 % of the loan in new deposits .20 % rate discount with 25 % of the loan in new deposits '' It is clear CIT acknowledged internally that their disclosures were inadequate, however they have been unreasonable and refuse to honor our original agreement. I'm left with two options - seek your assistance or spend the money for an attorney to defend me. I am concerned that attorney fees will quickly surpass the interest reduction, and am hopeful you help me fix this issue. 

Thank you very much.