Consumer complaint received 2021-12-31
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: GUARANTEED RATE INC. (GA)

On XXXX I applied for a mortgage on the website of Guaranteed Rate/ XXXX and was pre-approved for XXXX. The contacted me and briefly told me about the company. I found an ideal home which was a 4 unit quadraplex. The quad had three units occupied and one vacant which was perfect for me. I signed a contract to purchase the property on XX/XX/2020. At the time I was renting a property and my lease ended on XX/XX/2020 so my plan was to transition in my new home from the rental property. From the very beginning of the application process I felt very uncomfortable with the line of questioning and/or what seemed like more of an interrogation in terms of my sources of income. Because I was Self-employed, owned several rental properties and had almost XXXX I was regarded as suspicious. I understand that there is a certain protocol when underwriting is determining viabiity of the potention homeowner however I was made to feel as if my business, sources of income and or intentions as a homeowner was not fraudulent. On XXXX On XXXX the appraisal was ordered. I was notified that the file was in underwriting. On XXXX I got an email from the underwriter stating that one of the rental properties I reported for income seems suspicious because of the rental income I reported was too high. I also was told that I need to write a letter explaining why I would be moving from my current rented residense which was a 2,589 sq ft 3 bedroom / 2 bath into a 650 sq ft apartment with three tenants. I was repeatedly warned by the loan officer that If it's found out that I'm not using this property as my primary home and used for investment purposes that I would be facing federal time. I was appalled and offended that the mortgage company felt I was being deceptive in trying to get investment property on a primary residence loan. I explained to both the loan officer and the underwriter that I'm a single man with no kids and it's my perrogative if I want to downsize from my current residence. I already own another quadraplex that I used for my source of income and actually it's the same property that was in question about the validity of the amount of rental income, the underwriter wanted to know if I was willing to move into the quad that I'm trying to purchase why would I not move into that as opposed to renting a place. My response was again that it's my perrogative where I choose to live. The loan officer suggested I write a letter stating my quadraplex that I already own, which by the way was fully occupied however it was suggested that I state the reason why I choose not to move into my quadraplex is because it's in a low-inome area and therefore I chooose to rent the home I'm currently in. The letter that I ended up writing just stated that I'm moving because I want to downsize into something smaller and that fact that I would own the property as opposed to renting where I'm currently at make more financial sense. Despite my writing the letter the loan officer and underwriter repeatedly made references about it being against the law to defraud a mortgage company etc. Next was a series of emails from the underwriter and loan officer asking for all kinds of unnecessary and documents. On XX/XX/XXXX the appraisal came in under the purchase price. Both my Realtor and myself felt the appraisal was incorrect and too low especially being a thought a duplex withing one mile sold for almost XXXX and my appraisal was $ XXXX for a quad generating {$950.00} per month time 3. After bring our concerns to the mortgage company we were asked to get comparables to rebuttal what the apprasied value was. We did provide several comparables that was more realistic as the appraisal used a property in another county almost 10 miles from the subject property. Our request for a second appraisal was denied however they supposedly reviewd it and there was no change in the value. We reached back out to the seller and he agreed to lower the price. Next I was told by the loan officer that I needed to show documentation of my rental history where I currently lived. I provided the loan officer with 16 months of payment history showing that I had no late payments for my entire tenancy. I explained that on XX/XX/2020 that my lease ended and I explained that I was buying a house and wanted to go month to month until I move. The property managment company would not allow me to stay there month to month paying my previous rent at {$1300.00} instead they wanted to raise the rent to {$1700.00} unless I signed a two year lease and the increase would only be {$1300.00}. I refused to sign a lease and started to negotiate with the property management company a viable option for both parties. On XXXX I was asked to send a letter explaining the situation about the dispute in the rent and also about why I was downsizing into a one bedroom apartment from a 3 bedroom house. I sent the letter to the underwriter on XXXX. On XXXX I got an email from the loan officer stating the the missing rent issue will more than likely be waived and that the only concern was getting a new purchase agreement that would reflect the appraised value. On XXXX I got an email stating that the loan was approved pending a couple of documents that was needed. On XXXX out of frustration for the mortgage company delaying my loan and not giving me specific and adequate reasoning for not moving forward, I sent an email to the load office and the underwriter accusing them of Discrmination. I explained in my email that I was never given the proper respect as a potential homeowner and that I have been treated and regarded as if I'm some kind of malice intent. Everystep of this process felt like I as being undermined as a respectable business man and because they could not connect all the dots in terms of my sources of income they assumed to create their own narrative about me as a person. In my email I threatened the Guaranteed Rate/ XXXX with filing a lawsuit for discrimination and that I would be seeking legal representation. Because of the email I sent on XXXX on two days later on XXXX I received an adverse action letter from the loan officer basically stating that my loan was denied because I disclosed to the mortgage company that I with held paying rent for XXXX, XXXX and XXXX. I automatically knew that this was retalitory for my threatening to report them for discrimination. The mortgage company never recevied anything from my landlord or property managment company stating that I owe a balance. Prior to receiving the adverse action letter I expained to the mortgage company that the property management company and I were in negoatiations in terms of a feasible about the pay for the duration it took to close of the quadraplex. Despite being aware of that the mortgage company still sent an adverse action letter. On XXXX I reached out to the headquater office to make a complaint on being discriminated and see if my file could be reinstated. I spoke with someone named XXXX and I informed her of my dilema and that I was denied and was not given a deadline or even given the opportunity to provide something before they denied me. XXXX said she would try to get my file reopened however on XXXX I was notified by my agent that the seller decided to pull out due to us already having two exensions on the date, the seller did not have faith in our ability to close. I informed XXXX that I'm very upset because I paid for a home inspection which was almost {$1000.00} and the appraisal which was undervalued. XXXX apologized on the company behalf and offered to refund the appraisal money back to me. XXXX also indicated that she will do an internal investigation to see if any wrong doing was done. That was the last I heard from anyone regarding this experience. I feel that if I was denied for the rent issue then why was I not immediatley denied when I made them aware over a month prior to the adverse letter. I was denied out of retaliation, the appraisal was undervalued as that often happens with XXXX  homeowners and also I was not taken seriously as a businessman with legitamate income producing properties.