Consumer complaint received 2023-02-21
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Trouble during payment process — 
Company: LoanCare, LLC (VA)

We write to report deceptive acts and practices by LoanCare in the servicing of our Home Equity Line of Credit ( HELOC ) account with XXXX Bank. LoanCare was previously sanctioned by CFPB for misrepresenting consumer loan payment schedules ( XXXX XXXX XXXX ). Their deceptive conduct continues today and despite multiple phone calls with customer service and several requests to speak with legal / compliance, we have been unable to resolve our request to reverse unauthorized rate increases on our HELOC which had an interest rate lock feature that we exercised on XX/XX/XXXX ( at a rate of 2.625 % ). When we received a notice of rate increase dated XX/XX/XXXX, we contacted Loan Care on XX/XX/XXXX. During that call, LoanCare ' s own customer service agent, XXXX, acknowledged our fixed rate and stated " this letter does not apply to you '' explaining that our 10-year fixed interest rate on our HELOC was valid until XXXX ( consistent with the features of the HELOC ). Despite that assurance, LoanCare has continued to increase rates on our HELOC ( now at 6.375 % ) claiming the HELOC is variable, and disregarding clear evidence to the contrary including the Promissory Note and recorded calls. 

Below is a timeline : XX/XX/XXXX - Borrowers execute HELOC with XXXX ( predecessor to XXXX ) with two segments - Segment 1 primary mortgage with fixed rate, and Segment 2 home equity line with variable rate. Promissory Note confirms that Borrowers are approved for a " Fixed Rate Advance '' for a term of 10 years ( i.e. XXXX ). The " Fixed Rate Conversion Option '' provides an option to convert the variable rate to a fixed rate XXXX times during the life of the HELOC. The Promissory Note further provides : " You may exercise your Fixed Rate Conversion Option by calling us... All conversions will take effect on the day you lock your fixed rate with us. '' XX/XX/XXXX - Borrowers follow instructions in the Promissory Note and call XXXX Bank to lock Segment 2 of the HELOC. The customer service agent confirms she " Locked Segment 2 at 2.635 %. Since HELOC ( Segment 2 ) is now below primary mortgage rate of 3.375 % ( Segment 1 ), Borrower makes additional {$5000.00} payment to Segment 1 ( See XXXX on XX/XX/XXXX at XXXX XXXX  ). A request for the transcript of that recorded call regarding the Borrower 's exercise of the Fixed Rate Conversion Option and additional payment will corroborate these facts. 

XX/XX/XXXX - Borrowers receive notice that LoanCare will service the XXXX loan. 

XX/XX/XXXX - Borrowers receive notice of rate increase from LoanCare. 

XX/XX/XXXX - Borrowers contact LoanCare customer service to dispute the rate increase and XXXX in LoanCare customer service states, " This letter does not apply to you '' and confirms that our 10-year fixed interest rate on our HELOC is valid until XXXX. A review of the transcript from that call will corroborate these facts. 

XX/XX/XXXX - Borrowers receive a second notice of rate increase from LoanCare. 

XX/XX/XXXX - Borrowers send complaint via customer service information link disputed rate increase. 

XX/XX/XXXX - LoanCare Customer Communications Department NMLS ID XXXX replies " This HELOC has a fixed interest rate [ for Segment 1 ] but he also has a variable balance [ for Segment 2 ]. Look at the XXXX. Remember on some accounts the first draw is fixed and any draws after that are variable, which is how the get segmented. Please forward any documents for fixed interest rate or conversion to our website. '' XX/XX/XXXX - Borrowers respond, " You are wrong. We intend to report your fraudulent conduct to the appropriate regulatory authorities. Your own agent confirmed our HELOC is fixed until XXXX. You can not unilaterally change terms without contractual authorization. '' XX/XX/XXXX - Borrowers receive another notice of rate increase from LoanCare. 

XX/XX/XXXX - Borrowers provide LoanCare communications with XXXX confirming Fixed Rate Conversion Option on the HELOC ( Segment 2 ), noting LoanCare 's failure to honor the terms of the loan, and CFPB 's likely interest in misconduct and poor recordkeeping. 

XX/XX/XXXX and XX/XX/XXXX - LoanCare send additional rate increase notices. 

XX/XX/XXXX - LoanCare sends Borrowers a letter acknowledging fixed rate on Segment 1 and claiming variable rate on Segment 2, offering option to contact customer service to request conversion to a fixed rate for Segment 2 [ NOTE : at this point the interest rate on Segment 2 was double the rate we locked in XX/XX/XXXX ]. 

XX/XX/XXXX - Borrowers speak with XXXX at LoanCare to again dispute the rate increases and to confirm the interest rate lock in XX/XX/XXXX on Segment 2. LoanCare claims for the first time the fixed rate conversion in XX/XX/XXXX was not valid because new loan documents were not executed [ contrary to the express terms of the Promissory Note ]. Borrowers confirm line is recorded and intention to request transcripts of calls. 

XX/XX/XXXX - Borrowers receive voice mail message from XXXX at XXXX bank and is not able to reach the same agent. 

XX/XX/XXXX - Borrowers contact LoanCare and inquires about rates for conversion option during pendency of dispute, and LoanCare ( XXXX XXXX XXXXXXXX ) quotes a rate of 5.75 % starting in XX/XX/XXXX [ three months later, contrary to terms of Promissory Note providing new rate will take effect the day the Borrower converts the variable to fixed rate ]. Borrowers confirm line is recorded, request legal review of file, and request contact information for legal / compliance department. 

XX/XX/XXXX - Borrower contacts LoanCare ( XXXX agent XXXX ), is unable to reach XXXX, and requests complete file review before Borrower refers to regulatory authorities. 

XX/XX/XXXX - present. LoanCare continues to increase rates on HELOC Segment 2 that was fixed on XX/XX/XXXX.